Global steel prices continue their upward march even as Indian steel companies are finding it hard to pass on the increase in raw material cost to the end consumer.
Over the last fortnight, hot rolled coil (HRC) steel prices in the US have gone up $94/tonne to $1,097, while cold rolled coil (CRC) steel rose by $76/tonne to $1,194, a gain of 6.8 per cent. The increase in prices is primarily driven by increasing raw material costs and shortage of physical metal.
In Europe, steel prices have shown persistent strength on the back of surging raw material costs. HRC steel prices in western Europe have increased by $59/tonne to $1,066, representing a gain of 5.9 per cent, while CRC steel prices jumped by $63/tonne to $1,179. This the sixth straight increase in HRC steel prices in Europe since January 2008. In the last 3 months, HRC prices in Europe have increased from $713/tonne in January to $1,066/tonne.
However, steel prices in China, one of the main price drivers, have depicted a relatively moderate increase. HRC steel prices are currently quoted at $671 a tonne, up 2.1 per cent, while CRC was almost flat at $796 a tonne, up 0.8 per cent over the last fortnight as exports have fallen substantially due to high duties imposed by the Government.
According to data from General Administration of Customs China’s steel exports in February were 3.11 million tonnes, down 25 per cent month-on-month and 29 per cent year-on-year. In March, China steel exports were up 33.4 per cent at 4.15 mt.
“With the current round of price hikes globally, we believe Chinese steel mills might [take a] re-look at the export markets, with the only factor restricting exports being the high trade surplus with US,” said Mr Vishal Chandak, a research analyst at Emkay Stock Broking.
Source: The Hindu Business Line
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