Steel prices hiked for the second time in a week

Close on the heels of a stiff Rs 3,000/tonne increase in hot-rolled coil (HRC) prices effective from December 2, the domestic steelmakers have raised their benchmark product’s price by another Rs 2,200 per tonne. The latest price hike will be with effect from December 9.

A second hike during the month, on the back of buoyant domestic demand, was largely anticipated since the domestic HRC prices, even after the first hike in December, were at a 6% discount to import parity prices from China. Analysts said there could be the third hike after an inevitable revision in the prices of iron ore in the next few days.

Earlier in the week, minister for MSMEs and road transport Nitin Gadkari came down heavily on the steel and cement industries for jacking up prices, without valid reasons.

After the second hike in December, the wholesale price of HRC (ex-Mumbai) currently stands at Rs 51,000 per tonne, the highest since 2008, according to SteelMint. The current price is around 40% higher than that of July 2020. Steelmakers are tight-lipped.

The steel prices in the domestic market have been moving northwards on the back of rising domestic demand and iron ore prices, higher international prices and subdued production and limited imports, analysts said.

“The second round of price hike is the result of buoyant domestic demand as dealers have started re-stocking. There is good demand from the end-use consumers as well. Also, a near-nil import has given steelmakers room for jacking up the price,” an analyst said.

Japan and Korea, major two exporting countries to India apart from China, have now started exporting more to Europe since realisations are better in these countries compared to India. Besides, domestic demand in these two countries is also buoyant now.