Steel price records amazing upswing

In view of demand from infrastructure and housing sectors, domestic steel prices are set to increase by over ₹1,000 per ton, the first rise in six months, propped by a revival in domestic demand and price spiral in the international steel market. The signs of an impressive improvement in demand this month has given scope for price correction. Echoing similar sentiments, a score of experts studying the functioning of the steel mills in the country claimed that steel players are looking at a moderate price recovery of ₹1,000 to 1,500 per ton in December on the back of a small price correction this month. The October-March period traditionally represents two strong quarters for the steel industry as construction activity generally picks up in the post-monsoon period. This year, in addition to the seasonal impact on steel demand, a major contributing factor is the improvement in global prices by almost $40 per ton. A weak exchange rate translates into a higher price increase at home. However, domestic prices are yet to improve in tandem, since demand, though improving, is yet to catch up. In fact, an increase in price will improve the prospects of medium and large steel firms, including Tata Steel, Tata Steel BSL, JSW Steel, Essar Steel, Steel Authority of India, and JSPL as prices have been falling since May due to sluggish demand from infrastructure and construction sectors, and drop in orders from slowdown-hit auto sector.