Local steel prices may fall further on China exports – ET Infra

MUMBAI: Steel prices in the domestic market, which have been under pressure since late March, may fall further after a sharp surge in exports from China at lower prices that is seen undercutting exports from India amid weakening global demand.

At around Rs 57,000 per tonne, prices of hot-rolled coils in May are down by nearly 3-4% from April, and over 17% lower year on year.

Steel mills are likely to reduce prices or offer discounts of ₹1,500-2,000 per tonne in June as they look to push volumes, industry watchers said.

China, which accounts for 57% of the global production of steel, exported 7.3 million tonnes of steel in April, not only 82% higher than a year earlier but also higher than those in the month of April during 2017-2020, and only marginally lower than 7.97 mt exports in April 2021. This despite production in China falling 1.5% year on year to 92.6 million tonnes last month, Nomura Financial Advisory and Securities (India) said in a recent report.

These higher exports from China are also coming in at lower prices, which is pushing Indian steel prices lower as it is currently cheaper for domestic users to import Chinese steel rather than buying it from the local market, analysts said.

“While pent-up demand initially helped pull Chinese HRC export offers to a 9-month high of $695/mt by end-March 2023, the demand momentum appears to have lost steam thereafter,” said Jayanta Roy, senior vice-president and group head for corporate sector ratings at ICRA.

The oversupply in the Chinese markets has led to their HRC export prices slipping to $550 per tonne, a correction a 21% in 2022-23 (April-March), he said.

Steel exports from India, meanwhile, are turning subdued again after a brief respite between December to March last year, experts said. The exports were hit by an export duty levied from May to November last year. Steel production in Europe and the US fell by 13% and 4%, respectively, last month, which analysts believe is indicative of the subdued demand in these regions because of monetary tightening and impact of disrupted supply chains.

The World Steel Association estimates demand for steel in the US to grow by 1.3% in 2023, but to fall by 0.4% in the European Union and United Kingdom which are both lagging the 2.3% growth in demand expected at a global level.

  • Published On May 30, 2023 at 08:04 AM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Get updates on your preferred social platform

Follow us for the latest news, insider access to events and more.

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Open chat
How May I Help You.
Scan the code
Vishwakarma Guru Construction
Hello Sir/Ma'am, Please Share Your Query.
Call Support: 8002220666
Email: Info@vishwakarmaguru.com