HR steel tags to top $400/tn in Jan

US export duty of $30-32/tn seen as trigger

Hot-rolled steel prices are set to top $400 per tonne since the US has imposed an export duty of $30-$32 a tonne on scrap, leading to an acute rise in global steel scrap prices.

HR coil prices are currently pegged at around $370-$380 a tonne, and the new duty is likely to push up prices further.

Senior steel industry sources said, "Globally there is a shortage of scrap and scrap prices have been moving up consistently in the last few months. With the US government's new order the situation is likely to get worse as far as scrap supply is concerned and HR steel prices will look towards an increase of $20 - $25 per tonne."

Domestic steel companies feel that by the beginning of January, prices of HR coils are likely to cross $400. An industry official said, "Along with prices of scrap going up, prices of other raw materials will also climb and steel manufactures will be compelled to pass on the cost increase to consumers."

Global steel demand has been on the rise and will be able to accommodate the price hike, he added. Steel prices have been climbing steadily since last year and have seen almost 20 per cent growth in the last six months, fuelled by a surge in demand led by China.

Current scrap prices are hovering around $220 a tonne and was braced for a further increase of around $10- $15 a tonne before the US government proposed the export duty. Analysts say domestic sponge iron prices are also likely to go up tracking the rising scrap prices.