MUMBAI (Scrap Register): India’s domestic steel prices are expected to fall in the second quarter of this fiscal due to oversupply, further reducing margins for domestic steel producers.
A report by credit ratings agency India Ratings and Research has estimated that prices of both hot rolled coils (HRC) and rebars will fall in the coming few months.
Both HRC and rebar prices were down 3% and 4% month-on-month in June. In May 2020, steel prices temporarily rose although higher inventories were available with steel players. This was due to logistical constraints and man-power availability issues, resulting in limited supply to end-use industries which gradually re-opened post relaxations in the lockdown.
“Domestic gross spreads per tonne (realisation per tonne of steel less the raw material cost per tonne of steel) for both hot rolled coil (HRC) and rebar are expected to fall further in 2QFY21 with a further fall in steel prices due to oversupply," the report said.