Indian domestic steel producers may come under pricing pressure

• Tuesday, March 10, 2020
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[Ferro-Alloys.com] The Covid-19 outbreak is likely to adversely impact Indian steel prices, which have been witnessing an upward trend since November, ratings agency said in a report, while India Ratings & Research (Ind-Ra) warned that the demandsupply imbalance created globally will get worse with the virus spreading across the world. 

 

The novel coronavirus outbreak is likely to put pressure on domestic steel prices in the near term and increase downside risks for the sector due to a drastic supply-demand imbalance causing an inventory pileup, two reports released on Thursday said. 

 

Consequently, ICRA has revised its estimate of domestic steel consumption growth to 4-5 per cent in 2020-21 against its November 2019 forecast of 6.5 per cent. The Ind-Ra report said Indian steel producers would face pricing pressures of about $30 per tonne, which could result in margin pressures of $25 per tonne. 

 

“In fact, Indian steel mills have already started getting bookings for exports and are waiting for the prices to get better,” said Ranjan Dhar, chief marketing officer at ArcelorMittal Nippon Steel India. 

 

He said demand is going up in India. “Sentimentally, there is an impact. It will have an impact on stocking and restocking, as there is a huge retail market in India in addition to OEM market.” (The Economic Times)

 

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