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Domestic steel prices soften sharply on subdued demand outlook
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IANS | 02 Jun, 2022
Futures prices of steel on National Commodity & Derivatives Exchange
Limited (NCDEX) have softened significantly in the past one to
one-and-a-half month period.
Prices came down from its
recent peak of around Rs 61,000 per tonne to around Rs 46,500-47,000 in
the first week of June. At the time of writing this report, the
most-active June delivery steel contracts on the NCDEX were trading at
exactly Rs 47,000.
What triggered this sharp decline in its prices in the Indian market?
The
government recently waived customs duty on the import of some raw
materials, including coking coal and ferronickel, used by the steel
industry. Also, some experts say that the ongoing cool down of prices
has something to do with the weak demand for the commodity during the
monsoon season as some infrastructural activities typically slow down
with the onset of summer season.
Further, India's mining major
National Mineral Development Corporation (NMDC), which is under the
Ministry of Steel, produced 3.2 million tonnes of iron ore in May 2022.
This is 14.3 per cent higher than the 2.8 million tonnes that it
produced in May 2021.
NMDC's cumulative production during April
and May 2022 -- the first two months of FY23 -- stood at 6.35 million
tonnes, a 7.4 per cent growth from the cumulative production of 5.91
million tonnes from the same period of previous year.
"Our
consistent growth in production has not only made NMDC the fastest
growing iron ore mining company in India but also the most consistent
supplier to the domestic steel sector," said Sumit Deb, CMD of NMDC
while releasing the production data on Thursday.
The reduction in
the prices of the raw material will have an optimistic impact on the
sector to keep the prices in check, Himanshu Jain, VP - Sales, Marketing
and CRM, Satellite Developers had said recently.
According to
Sachin Chopda, Managing Director of Pushpam Group, the reduction in
import duties on iron ore and steel shall further pad the domestic
availability of raw materials, which in return shall reduce the prices
of steel products used in construction and control the rising prices of
properties.
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| Customs Exchange Rates |
| Currency |
Import |
Export |
US Dollar
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84.35
|
82.60 |
UK Pound
|
106.35
|
102.90 |
Euro
|
92.50
|
89.35 |
| Japanese
Yen |
55.05 |
53.40 |
| As on 12 Oct, 2024 |
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