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Flat steel prices in India to come under pressure - ICRA

Steel News - Published on Wed, 05 Dec 2018

Image Source: ET
According to a recent ICRA research report, domestic flat steel producers may have to brace for a downward revision in prices in March quarter to say afloat. Mr Jayanta Roy, Senior Vice-President, ICRA said “Chinese hot rolled coil export offers have declined from USD 560 a tonne in the first week of October 2018 to USD 477 a tonne in end November. The concern on oversupply amidst weak demand during the winter season may lead further drop in seaborne steel prices in the coming months. On the domestic front, seasonal weakness in demand in September quarter led to fall in domestic steel consumption growth to 7.8% from 9.2% logged in June quarter, even though it remained healthy in absolute terms. Steel imports, especially from free-trade countries such as Japan and South Korea, are likely to remain high in the coming months, which would keep domestic steel production growth under check. While the domestic hot-rolled coil prices are currently trading at a marginal premium over imported prices, the steep reduction in international steel prices recently would make imports cheaper from January 2019 onwards, when these shipments start hitting Indian shores, and would in turn exert pressure on domestic steel prices.”

China’s steel production growth remained high at 5.8 per cent in September quarter in anticipation of stricter environmental curbs during the winter months. Production recorded an all-time high of 82.5 million tonne in October 2018. However, there is an uncertainty over production curbs, after China allowed local governments to decide on meeting their individual emission targets rather than imposing a blanket ban on production. The move may result in possible supply glut in China, leading to large scale exports.

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Posted By : Sanju Moirangthem on Wed, 05 Dec 2018
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