Steel prices will continue to rise on “strong demand” and as the supply chain is disrupted by the Ukraine-Russia conflict, according to SteelMint, an industry consultant. SteelMint founder and CEO Dhruv Goel noted that prices on the international market have risen by roughly USD 135 per tonne and have continued to rise since the conflict began in the last week of February.
In the domestic market, hot-rolled coil (HRC) prices were in the range of Rs 68,000-69,000 per tonne in the first week of March, compared to Rs 65,500-66,500 per tonne the previous week; and cold-rolled coil (CRC) prices were at Rs 73,000-74,0000 per tonne, compared to Rs 71,000-72,000 per tonne the previous week, he said.
“The conflict has impacted the movement of raw materials as well as goods. There is a good demand for steel. We anticipate these two factors will further improve the prices,” he said.
Oil prices were at USD 90 a barrel before the war between Russia and Ukraine began, according to industry estimates. Rates are currently trading near 120 USD per barrel, with a forecast of USD 180 per barrel in the next days.
As oil prices rise, cargo ship freight rates, which are currently at USD 20,000 per day, are expected to rise to USD 30,000 per day.
Similarly, the cost of coal is increasing. Coking coal prices have surpassed USD 550 per tonne, up from USD 250 before the crisis.
Imports account for 85 percent of India’s coking coal needs.
Besides coking coal, iron ore is another key raw material used in steel making by companies in India.
According to Icra, the domestic steel demand is expected to grow at 7-8 per cent in FY2023 on the back of an estimated growth of 11-12 per cent in FY2022, supported by the government’s large infrastructure spending plans.
