Steel companies have raised prices for hot and cold-rolled coils to close the gap between domestic and import prices, even though local demand has remained weak due to the Covid-induced lockdown in the states .

Prices for hot-rolled steel were increased from 4,000 yen per tonne to 70,000 yen while those of cold-rolled steel rose from 5,000 yen to 85,000 yen per tonne, sources said.

The current hike follows an increase of ₹ 5,500 per tonne in two installments last month.

Despite the series of increases, domestic steel prices are still down 10 percent from the landed cost of imports, a steel company executive said.

However, he added that it could be the latest hike in India, as China’s domestic and export prices have corrected sharply in the past fortnight, posing a risk to regional prices.

In fact, HRC prices in India have increased by 14,000 yen per tonne since the end of March. The rebound in steel prices comes even as demand in April fell 23% to 6.78 million tonnes from March.

Crude steel production in April fell 17% month-on-month to 8.3 million tonnes as steel companies diverted oxygen for medical purposes. Demand and production are expected to decline further in May, as most steel-consuming industries shut down due to strict lockdowns announced by various states.

Steel consumption is expected to decline in the June quarter compared to the March quarter due to the second wave of Covid.

Steel companies relied on the export market to beat weak demand in India. Last month, China cracked speculators for pushing prices to dizzying heights.

As a result, the price of steel in China has already fallen 17% from its recent highs of 867 tonnes. With falling prices in China, global steel prices are expected to drop, putting pressure on Indian companies.

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