Structural grade leads surge in steel prices

Rises by Rs 600 at Rs 20,000/ tn; non-flat products too surge by Rs 200/ tn

The current price hike in steel products in Mandi Gobindgarh has been led by structural grade steel, which saw a rise of about 4 per cent or Rs 600 a tonne in the last fortnight owing to a spurt in demand from the construction industry.

Structural steel is quoting in the range of Rs 19,500-20,000 a tonne.

In Mandi Gobindgarh, prices of non-flat products too increased, by Rs 200 a tonne, in the same period, while sheets prices followed with a gain of Rs 100 a tonne in the last two weeks. However, prices of flat products remained stagnant during the period.

While steel ingots of structural quality are selling at Rs 19,400 a tonne, low-carbon ingots are quoting at Rs 19,800 a tonne.

In the same period, billets and squares gained Rs 300 to quote Rs 19,800 per tonne, while blooms (cuts into pieces) remained flat at the Rs 24,600 a tonne level. Durgapur slabs and other products gained almost Rs 200 to Rs 20,200 a tonne.

Flat products, meanwhile, stayed put at the levels they were, with plate 5-10 mm quoting at Rs 25,800, HRC at Rs 26,700, HRS at Rs 26,000, CRC at Rs 33,000 a tonne, and so on.

Natural calamities in west and south India forced construction activities to remain virtually static in the last quarter of 2005. However, some construction initiatives were reported in the recent past with the process of rehabilitation on in the disaster-hit areas.

The steel industry is currently facing a shortage of raw materials like melting scrap, and so, raw material prices are steadily looking up. In the last fortnight, melting scrap price shot up by Rs 400 to Rs 16,100 a tonne.

Currently, melting scraps are not being imported in huge quantities, as traders have taken a short-term approach before the forthcoming budget with focus on meeting their current requirement only.

"We are expecting that import duty on finished goods would be reduced substantially in the budget from the present 16 per cent. So, we intend not to store scrap for the time being. We would resume scrap imports after the budget," said Anil Suraj, managing editor of Steel Times Weekly, who also runs a steel production unit in Chandigarh.

India produces about 36 million tonne of steel, of which it exports about 4 million tonne. The country targets to produce 100 million tonne of steel by 2012.