Domestic steel prices in India are projected to stay firm through September amid rising construction activity and supply constraints, with rebar anticipated to outperform hot rolled coil in the near term.
Domestic steel prices in India are expected to hold firm through September as post-monsoon construction activity begins to pick up and maintenance-related outages keep supply tight, according to a report from SBICAP Securities. The brokerage said rebar, a key bar used in construction, is likely to outperform hot rolled coil, or HRC, in the near term as demand improves and producers remain constrained by planned shutdowns.
The August rebound in rebar prices helped reset the market after three straight monthly declines. SBICAP Securities said the average BF-route rebar price climbed 8.6% month on month to Rs 53,294 a tonne, while the gap between HRC and BF-route rebar narrowed sharply to about Rs 5,280 a tonne from a 42-month peak of roughly Rs 8,800 a tonne in July. Mumbai HRC prices also edged higher in August to Rs 58,575 a tonne, before rising further to a four-year high of Rs 62,000 a tonne on 1 September.
Underlying demand has remained supportive. Data from the Joint Plant Committee cited in the report showed finished steel consumption rose 6.5% year on year to 14.4 million tonnes in July, while finished steel output increased 1.4% to 13.7 million tonnes and crude steel production rose 1.2% to 14.3 million tonnes. Trade flows were also active, with exports up 44.1% and imports up 9.5% in July, leaving India as a marginal net importer. SBICAP Securities said the next move in prices will largely depend on how quickly post-monsoon demand returns and whether the export-import balance stays favourable for domestic mills.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
