Steel prices could rise again

Steel prices in India may rise for the third time in a month, which is a rare case of volatility in the iron ore market. Since India has become the second largest steel producer in the world, the situation with the upcoming increase in prices for rolled metal products will be projected at the global level.

The third hike may take place on March 1, sources told Moneycontrol. The increase will be Rs 1,000 per tonne and the total growth in 30 days will be Rs 2,750 per tonne. In the last round, the price of hot rolled steel will rise to Rs 44,200 per tonne.

Hot rolled steel is the main product grade.

“This increase has rarely happened, it has not happened in the past eight years,” said an industry official.

Prices were raised at Rs 750 per ton for the first time in the first week of February. The second increase, Rs 1,000 per tonne, occurred in the third week of the month.

The latest increase in steel prices comes after three consecutive months of rate cuts in India and around the world. “Prices have plummeted since November, especially due to the Chinese factor,” said the industry leader.

Demand in China, the world's largest steel market, has eased since November, although production has also declined.

But an accident at a Brazilian iron ore mine owned by the world's largest producer Vale SA has raised raw material prices. According to reports, the dam accident will affect about 70 million tons of iron ore mining.

This led to an increase in steel prices on the world market.

The latest round of steel price increases, if any, could also be linked to iron ore rates, this time on the domestic market. State miner NMDC raised iron ore prices by Rs 400 per ton on Feb.22. A spokesman for the country's largest iron ore producer confirmed the rise.

But rising steel prices may not be sustainable, industry executives say. “Demand is still soft,” the executive said. However, the hike will be good news for steel companies - JSW Steel, Tata Steel, SAIL and Essar Steel.