Economic Times reported that condition for Indian steel players is worse when compared to their global peers.
At a time when global steel prices are rising, prices domestically have remained flattish due to subdued demand and continuing imports. The condition is not expected to get better anytime soon.
Realizations for Indian steal players were subdued in the month of October and November due to flat steel prices YoY. Lower consumption growth of 4% YoY was the primary reason for lower prices. Additionally continuing imports from Japan, Korea and China had put pressure on realizations.
Constant prices amidst increasing raw material costs are expected to hurt Indian steel players, especially ones without any captive resources. Indian iron ore prices have increased nearly 30% to USD 120 per tonne in last 3 months due to improved demand from China and supply constraints. However, coking coal has seen much lower increase in last quarter as prices increased by 10% to USD 160 per tonne.
Global prices increased by USD 25 per tonne to USD 30 per tonne due to low inventory and improving demand. The US led the increase with prices rising by more than USD 50 per tonne due to improvement in construction activities and increased prices of scrap.