Steel prices of mid scale mills are expected to find support from the coming week due to curtailed production of secondary mills & tight supply with large scale mills.
SteelMint learned that the primary mills are planning to further raise their price in the next week for September deliveries. Reasons behind price hike cited are – strong global prices amid shortage of material and sufficient orders in hand for both semis & finished steel products.
Another reason for positive trends highlighted are, increasing price gap between secondary & primary mills finished steel prices, which is currently hovering at INR 4,000-5,000/t in the prevailing offers of rebars in southern, western & eastern India. This may result in improved demand with mid scale mills, after the prices of primary mills increase further in the coming week.
In addition to that, iron ore prices remain supported in the domestic market due to which prices are likely to remain supported and are expected to remain in the same range or increase in coming days. Iron ore fines price in Odisha have increased by 25% in last one month and that of lumps by around 34%.
Also, pellet prices remained strong & recently dropped only about INR 200-500/t in comparison to slump in sponge prices by INR 2,000-2,500/t in Aug’20. Imported coal prices also remained strong and surged by $5-7/t in Aug’20. Hence to maintain margins, the mid scale mills may push up prices in coming days.
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