Indian steel sector seems to be on the road to recovery with companies increasing prices by around Rs 2000 per tonne across all products this month on the back of better demand and rising global prices. This is the second hike in less than a month after companies raised the metal price by about Rs 750 per tonne in July.
A combination of global price hike, supply correction that has happened overall in the system, and a pent-up demand as several segments are trying to make up for the lost quarters. In June the demand was very low and there were no margins, thus the price hike is well absorbed
State-run Steel Authority of India said its bookings remain strong even after the recent price hike.
Domestic steel prices are following the international price trajectory that saw a strong recovery on increasing demand from China. Car sales are slowly picking up in the country, while two-wheeler and white goods segments are doing well. Indian Railways is expected to start train service this month and the market will be bullish from then on