Due to demonetization of old higher value notes by Indian government earlier this month, the rupee value has been falling and the international prices of steel are rising. The demand for steel has been low in the domestic market and so the international markets look more attractive now.

 

The hot rolled coils (HRC) are in the range of $505­-$515 free on board (fob) per tonne in the international market.  The increase in steel prices has happened due to increase in the price of raw materials. Coking coal and iron ore are two important raw materials required for producing steel and both have seen a surge in prices in last months.

 

The international steel rates have increased by 56% from last year to this year. Even the steel from China which is the top producer of steel in the world has increased. After a time of down the retail sales, os steel is slowly picking up. Flat steel products being mainly used in automobiles and consumer goods is also picking up. As per the Steel ministry’s data, this year during September the exports increased by 0.6 million tonnes which are an 111% increment from September 2015.

 

Exports can boost the sales of the steel industry as the rupee value is down. Otherwise, domestic demand looks down and the industry experts feel demand will pick up after the monsoon period but overall will be less by 15-20% this year.

 

Local steel consumption has increased by 3.6% in the first six months of this fiscal and reached to a figure of 41 million tonne. Steel imports fell down by 37.3% to 3.6 million tonne in the same period of this fiscal. This happened primarily due to center’s safeguard measures like antidumping duty, safeguard duty, and minimum import prices.