Steel prices inch up 2%

Shortage of raw material and dip in imports key triggers

After three weeks of stagnation, steel prices in the physical market have started gradually moving up.

In the last one week, virgin steel and scrap prices have gone up by about 2-5 per cent (Rs 400 per tonne) across all sections in Mandi Gobindgarh - the premier steel market in the country.

The reason for the rise has been attributed to a shortage of raw material and slump in imports. While plate 5-10mm is quoted at Rs 28,400 per tonne, hot rolled coil (HRC) and hot rolled sheets (HRS) both are sold at Rs 23,900 per tonne.

Cold rolled coils (CRC) and cold rolled sheets (CRS) were today sold at Rs 33,400 per tonne. Billets (100x100mm mild steel) and 100x100 concast billets of SAIL-DSP were quoted at Rs 19,800 per tonne each.

"Though late, construction activities have kicked in the country. The current price rise can partially be attributed to this," said Anil Suraj, managing editor, Steel Town Weekly. He also runs a steel production unit in Chandigarh.

A Pakistani steel delegation under the aegis of the Lahore Chamber of Commerce and Industry had visited the Gobindgarh market and some of the producers there last week. It is learnt that the Pakistani government has permitted steel importers there to trade with India.

"However, they are expected to place orders in the second fortnight of December and things would take a concrete shape only then. If the demand is higher than expected, it would be a major boost to the domestic players. Pakistan is likely to require a lot of construction steel for rebuilding its infrastructure that was damaged in the earthquake," Anil said.

Dhanpat Gupta, director, Soorajmull Baijnath Ltd, said, "If the exports to Pakistan opens through Wagah boarder, it will give a new dimension to steel demand here."

He, however, denies any price rise in the local market. "In fact, the prices have gone down by about five per cent in Mumbai due to a lack of absolute demand," he says.

The down trend is over and prices have started looking up which would continue throughout the financial year as all the projects planned by the government would be cleared soon. This would give a boost to steel demand, feels Anil.

However, Gupta says any such move would take at least one-and-a-half months and by that time the prices would have again slumped by Rs 500 in the local market.