Steel prices improve but could face headwinds: Ind-Ra – ThePrint
Bombay (Maharashtra) [India], May 29 (ANI): Domestic steel consumption is expected to be weak in the first quarter of FY22 qoq due to the second wave of Covid, but not at the low levels seen in the first quarter of l ‘exercise 21 when operations cease altogether, according to Assessment and Research in India (Ind-Ra).
The second wave is likely to impact sustainable automotive and consumer demand and partially delay construction and infrastructure activities.
However, Ind-Ra said high international prices and export demand will allow steel producers to increase export levels, although high freight and shipping costs and container availability may be the subjects of concern.
India’s finished steel consumption in April was 6.78 million tonnes, down 23 percent month-on-month, but still 8 times higher year-on-year ‘other.
In contrast, crude steel production was 8.3 million tonnes. Domestic steel production was driven by increased exports and higher levels of capacity utilization than last year.
As a result, domestic steel production increased 27 percent year-on-year to 30.1 million tonnes from January to April.
Globally, crude steel production from 64 countries rose 23% to 169.5 million tonnes last month, due to the opening of economies as the pace of vaccination of citizens against Covid-19 has increased, higher government investments and high steel prices.
Ind-Ra said the decline in Chinese future prices over the past week may have a partial impact on India’s export orders and domestic prices in the near term.
“Given the Chinese government’s efforts to control steel prices and the drop in demand due to the foreclosure, domestic and international prices are expected to face headwinds, but will remain above pre-Covid levels . “
Domestic hot-rolled coil prices increased 3 percent month-over-month and 78 percent year-over-year in mid-May to reach Rs 65,250 per tonne. Likewise, domestic rebar prices increased by Rs 3,000 per tonne month-on-month to Rs 56,000 per tonne.
Domestic steel prices have increased due to rising export orders, leading to lower supply in the trade segment, strong global demand, and high international steel and ore prices of iron.
However, domestic demand is expected to be subdued due to lockdowns and rising infection rates, which will impact sustainable demand and auto and consumer consumption levels in the first quarter of this year. Exercise 22. (ANI)
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