Construction Industry News
Prices in the long products segment have fallen by about 10-15% to Rs 57,000 per tonne in the Kolkata market, from a high of Rs 65,000 per tonne.
Steel sector players face challenges from high raw material prices as finished steel products began to decline in April after the Russia-Ukraine war.
Steel prices from leading players were Rs 75,000 to Rs 76,000 per tonne.
Steel Rolling Mills Association president Vivek Adukia told media that steel products such as TMT bars and structures have fallen to 10%-15% due to sluggish demand and are expected to decline more before settling down.
He said costs have risen by 50% despite a compromise on the quality of the inputs, while the secondary steelmakers using Direct Reduced Iron (DRI) require high-quality thermal coal to make sponge iron. Imported coal prices of $120 a ton had risen to $300 a ton after the war between Russia and Ukraine.
According to Crisil's report, steel prices could hover around Rs 60,000 per tonne by the end of the current fiscal year, up from Rs 76,000 per tonne in the past month.
Tata Steel CEO and Managing Director TV Narendran told media that prices in India could be Rs 8,000 to Rs 8,500 per tonne higher than in the fourth quarter, which will cover the cost increases due to high coal prices.
Koustav Mazumdar, associate director of Crisil Research, said that with the onset of monsoons and less lucrative exports, domestic steel prices should start to fall and move towards Rs 60,000 per tonne by March 2023, down from Rs 76,000. per tonne, which will be well above pre-pandemic levels.
Adukia said steel companies are now forced to import coal because Coal India Limited (CIL) is not listening to their demands.
He said that if coal prices in the international market do not fall, 30%-40% of secondary steel units will have to reduce or close production. There are about 65 secondary units in West Bengal, employing one lakh.
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