Domestic steel industry has been continuously raising product prices since November despite the absence of green shoots. There are no strong demand indicators, or green shoots, at all which can keep these price hikes sustainable. Demand from infrastructure is still to pick up and auto sector continues to be weak.
Domestic steel producers have raised product prices by about Rs 2,000 per tonne for February. The February price hike is also in anticipation of a demand pick up that stockiest have stocked their yards. There is no on-ground demand so far. Higher raw material costs, increased global steel prices and expectations of a demand pick up have been the only reasons for domestic steel producers to raise prices every month since November so far.
Currently, hot-rolled prices are ruling at Rs 40,000 per tonne in the domestic market, up from the 15-month low of Rs 33,500 per tonne rate noted in mid-2019. However, the current price point is far lower than Rs 47,000 per tonne rate for hot-rolled noted in October 2018.