Indian long steel prices prices have surged by INR 11,000-12,000/MT (35-40%) since beginning of 1st Jun’17 till 20th Jun’18 as per the data maintained with SteelMint. The reasons behind sharp increase in steel prices are as follows:
Hike in raw material cost
The prime reason behind the increase in Indian Steel prices is due to hike in raw-material prices like iron-ore, cooking coal & scrap prices both in domestic & international market.
Domestic iron ore prices of NMDC (C.G.) surge by about 22-26%, imported scrap prices & imported coking coal prices up by about 35% in the last one year. Domestic iron ore prices moved up post suspension of iron ore mining operations at few major operational mines in Odisha over illegal mining.
Another important reason for the increase in steel prices is because of Chinese government taking strict measures on supply side reforms in the last two years.
As per the market reports, China has shut down around 115 MnT of steel capacity between 2016 and 2017 and closed about 140 MnT of Induction furnaces that use scrap metal to make steel.
Increased government spending on infrastructure projects
The demand drivers which the Indian steel prices has been supported in the last one years is due to huge spending by government on various infrastructure projects like bridges, lift irrigation, metros, highways and commercial buildings and stores.
Recently, Indian Government has also announced for an early completion of 10 million rural house at the end of current year 2018, ahead of March 2019 deadline. The urban component of 11.8 million houses may be completed by 2020 instead of 2022 deadline under the “Housing for All”.
The Bharat Mala project, the second largest highway development includes a total investment of INR 6,92,000 crores and the construction of 34,800 kilometers of new roads.
Indian Steel Prices Jun’18 vs Jun’17
| Date | 12-25mm Large Rebar Mills (Delhi/NCR INR/MT) | % Change | 5.5mm Wire Rod (Raipur INR/MT) | % Change | Iron ore Fe 62% fines prices in USD/MT (CFR China) | % Change | NMDC Chhattisgarh Iron Ore Fines Fe 64% (INR/MT) | % Change | HMS 1&2, Dubai (CNF India,USD/MT) | % Change | Premium HCC (CNF India USD/MT) | % Change |
| Jun’17 | 34,000 | – |
30,000 | – |
57 | – |
2,185 | – |
275 | – |
155 | – |
| Jun’18(till 20th) | 45,500 | 34% | 42,000 | 40% | 65* | 14% | 2,660* | 22% | 370 | 35% | 210 | 35% |
Source: SteelMint Research
All prices are monthly average
* current price
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