Strong domestic demand, along with low finished goods inventories, is projected to support domestic steel prices in much of the world.
Steel consumption in India rose 9% year-on-year and 3% month-on-month to 9.97 million tonnes in January 2021, according to the report.
Notably, growth came in the strong base period of 20 January, when demand also grew by 9% YoY.
This growth was supported by robust infrastructure demand and double-digit growth in automotive, home appliances and consumer durables.
“The decline in exports and the rise in imports also indicate a strong recovery in domestic demand. The decline in steel inventories in the domestic market provides comfort for steel prices, ”the report says.
“However, domestic rebar prices came under pressure due to increased supply and declining demand in the construction segment, fueled by high prices for building materials such as cement and steel.”
On the other hand, the report indicates that domestic HRC prices remained high on the back of strong demand and regional prices.
"However, the decline in iron ore prices driven by increased supply is flattening steel spreads."
“Thus, despite the decline in steel prices, domestic steel spreads remain high, increasing Rs 5,600-6,000 per tonne compared to the Q3 average of fiscal 21.”
