by Jonathan McGaha | December 30, 2009 12:00 am
Indian steel prices are set to stay firm in 2010, after sliding nearly a fifth year-on-year, sparked by a global demand recovery, but the 2008 peak looks distant as imports gain momentum. Key raw materials iron ore and coking coal have also risen 65 to 70 percent from their 2009 lows, prompting price hikes globally while local players have said they will also hike rates by 5 to 7 percent in January as demand grows. Currently, Indian steel is quoting at Rs 35,290 a tonne. Consumption in the world’s second fastest growing major economy is set to rise more than 12 percent compared with global usage of 9.2 percent. Local Indian steelmakers are worried that buyers may turn to China, the world’s top consumer and producer of the metal, which produces cheap steel and is aggressively raising output. Chinese steel output has been growing at a rapid clip and is seen around 600 million tonnes by the end of this year, up from 500 million tonnes a year ago. The latest data from the World Steel Association show that global crude steel output rose nearly a quarter year-on-year to 107.5 million tonnes in November. China’s output surged 37.4 percent to 47.3 million tonnes. “Indian prices are still at a premium to China but with higher input costs even Chinese will have to raise their rates, Pawan Burde, analyst at Pinc Research said. “Non-integrated players may suffer if (raw material) prices go beyond control.”
–Courtesy of www.bloomberg.com
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