Steel companies bullish on prices in near future

By: |
December 10, 2020 8:53 PM

Steel Authority of India director commercial Soma Mondal said prices are driven by global trends, higher demand both in domestic and international markets and the surge in input costs.

Domestic steel has been defined as one which has been manufactured in India and having local content ranging from 20-50%.

Steel companies are bullish on prices of the metal for the next two quarters and seeking to resolve supply-side constraints after the raw material cost has risen sharply, officials said on Thursday.

Speaking on the Centre’s target of producing 300 million tonne of steel by 2030, they said the sector will achieve it with rising demand for the metal but could take three-four years more than the deadline, and the supply-side stability is required to meet the goal.

Steel users complained of a sharp rise in the metal prices by about 40 per cent in the last four months.

“We are bullish on prices for the next two quarters,” Vedanta Electrosteel Ltd CEO Pankaj Malhan said at the ‘Mining Conclave’ organised by Bengal Chamber of Commerce and Industry.

Steel Authority of India director commercial Soma Mondal said prices are driven by global trends, higher demand both in domestic and international markets and the surge in input costs.

“Iron ore prices have moved up to USD 150 per tonne and coking coal prices have escalated. In this scenario, steel prices cannot stay isolated. However, I think prices would stabilise soon.

“We have reduced exports to support higher domestic demand,” Mondal said.

Experts lauded the steps taken by the government to push domestic demand as these, according to them, will help reach 300 million tonne production from  the current capacity of 140 million tonne.

“Call for AatmaNirbhar Bharat or self-reliant India and steps taken by the government are on the right direction and the country may not accomplish 300 million tonne capacity by 2030 but it will happen in three years later,” ArcelorMittal Nippon Steel India CEO Dilip Oommen said.

The company has planned to double the capacity to 20 million tonne in the first stage and will look into other options to grow, he said.

SAIL chairman A K Chaudhary called for coking coal security for the steelmakers.

“There will be no demand constraint, and issues could be on the supply side,” Mondal said.

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