World crude steel production registered a marginal increase of two per cent at 130 million tons in July with a sharp drop in output reported in the Euro Zone, according to World Steel Association (WSA) data released on Wednesday.
Steel production in India rose by 6-7 percent in July. In the last seven months, the country's crude steel output was up by 3% at 43 MT. China's crude steel production was up four per cent at 62 MT.
The increase in Chinese production was a big surprise as the industry was expecting a sharp drop due to their economic slowdown and maintenance work undertaken usually during these months.
In India, steel prices especially that of long products are under pressure in the last four months due to lower demand and sharp fall in scrap prices.
Weak rupee has restricted any significant dip in prices. The fall in supply due to the ongoing strike in Punjab to protest against power tariff hike has helped steel prices stabilize.
In contrast to the global markets, iron ore prices in India are still higher due to supply constraints on account of the iron ore mining ban in Karnataka. NMDC recently hiked prices by 8-13 per cent to Rs 6,100 a ton for lumps and Rs 3,000 a ton for fines for the September quarter.
The profit margin of steel companies in India may continue to remain under pressure with the drop in demand and rise in input cost, said an analyst.
Productions worldwide were:
Germany's production was down by 2 per cent to 4 MT Spain's was up by 7 per cent and UK's rose 7 per cent to 1 MT. Brazil's production was down by four per cent to 3 MT. US production was up by one per cent to 7 MT and that of Russia's jumped by four per cent to 5.9 MT, said WSA.
Globally, steel prices stabilized during the last fortnight on expectations of a cut in Chinese steel production. Black Sea (free on board) HRC (hot rolled coil) export prices hover at $557 a ton, while it was $670 a ton in North America and $634 a ton in North Europe.
Source: Business Line
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