Construction Industry News
Domestic steelmakers have increased the cost of hot rolled coils (HRC) and TMT bars by up to Rs 5,000 per tonne as the supply chain is affected by the ongoing conflict between Russia and Ukraine.
After Russia invaded Ukraine, supply problems affected the global cost of wheat, soybeans, fertilizers and metals such as steel, copper and aluminum, raising concerns about cost and economic recovery.
Costs have risen in recent days and are likely to rise further in the coming weeks as the crisis between the two nations deepens.
After the price update, a ton of HRC will cost about Rs 66,000 while the buyers will buy TMT rods for nearly Rs 65,000 per ton.
Meanwhile, the Nifty Metal index is up about 12% in the past five trading sessions, down from a 2% drop in Nifty 50. Domestic brokerage Motilal Oswal believes Russia's approval will reduce the cost of aluminum, nickel, steel, thermal coal , and PCI coal positive.
India is a net exporter of aluminum and so the brokerage believes that companies like Hindalco, National Aluminum Company (NALCO) and Vedanta Group will benefit from the high aluminum costs.
While Coal India will be the biggest beneficiary of a rebound in coal demand, Tata is likely to be the biggest beneficiary of an increase in steel costs in the EU.
Motilal Oswal believes the approvals for Russia will disrupt the supply chain for certain commodities, and it could take up to several months to restore the entire supply chain. Costs are likely to remain high until this is achieved.
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