Mumbai: Steel prices could fall further in coming weeks as domestic production will gradually increase with the easing of lockdown restrictions along with
Mumbai: Steel prices could fall further in coming weeks as domestic production will gradually increase with the easing of lockdown restrictions along with no corresponding increase in demand, according to India Ratings and Research (Ind-Ra).
As a result, domestic gross spreads per tonne — that is realisation per tonne of steel minus raw material cost — for both hot rolled coil (HRC) and rebar are expected to fall further in the second quarter (July to September) of current financial year 2020-21 with a further fall in prices due to oversupply.
By mid-June 2020, rebar spreads corrected more than HRC spreads due to a sharper fall in demand than available supply. This was because of the presence of several small and mid-sized players and fragmented nature of the industry within the long products segment, leading to intense competition.
However, said Ind-Ra in its latest credit news digest, rebar spreads are likely to be less impacted over the near term up to end-FY21 compared to HRC due to a likely better demand pick-up, leading to a price increase backed by the expected implementation of government spending on infrastructure.
