NEW DELHI: Steel prices in India have fallen sharply over the past three-and-a-half years, reflecting a major downturn, driven by sluggish domestic demand and increased imports.
As of August 2024, prices for cold rolled steel (CRT) stood at Rs 57,400 per tonne, down from Rs 71,000 in December 2021. Similarly, hot rolled coil (HRC) steel prices fell about 24% to Rs 50,300 per tonne, compared to Rs 66,000 in late 2021, as per BigMint, a platform for price reporting.
Experts say the decline in prices can be attributed to multiple factors, mainly lack of robust demand both domestically and internationally. Experts note that a decrease in raw material costs has contributed to downward pressure on steel prices. Steel imports from countries such as South Korea, China, Indonesia, Vietnam, and Japan has exacerbated the situation, as global suppliers have sought to offload excess inventory in the Indian market.
In response to these challenges, the Indian government recently initiated anti-dumping probe against Vietnam, even as existing duties on Chinese steel have not significantly mitigated the impact of lower-priced imports from China. As per experts, anti-dumping probe is unlikely to have a substantial impact in view of high levels of inventory and the fact that domestic production and imports have outpaced demand.
“The price decline is an issue – but it’s almost entirely attributable to the massive excess capacity in the Chinese market, combined with Vietnamese manufacturers being affected by steep fall in domestic steel demand of China. ,” said Mukund Pant, Managing Director at Metal Power Analytical.
Despite the current slump, analysts are cautiously optimistic about a potential rebound in demand. BigMint projects a 7-8% rise in steel consumption in the current fiscal, fueled by the festive season and recent approvals for various infrastructure development projects by the government. Implementation of these projects is expected to accelerate following the October festive period.