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Steel prices might take at least two years to cool down as its demand is consistently increasing, a top industry excecutive said.
During the current financial year, the demand for steel in India is also expected to exceed the production numbers, Jindal Steel and Power Ltd (JSPL) Managing Director V R Sharma told PTI.
While the demand in the financial year 2021-22 will be in the range of 140-150 million tonnes (MT), the country’s production is expected to be somewhere around 125 MT, he said.
When asked about an estimated time for the steel prices to cool down, he said, “It (prices) will take around two years (to ease), because of the demand.”
While hot-rolled coil (HRC) in India is trading at around Rs 58,000 per tonne in April, the international steel prices are hovering around USD 735-740 per tonne since April 1, 2021.
Both domestic as well as international prices are 50 per cent higher compared to a year-ago period.
He also said most of the countries, including India, have announced stimulus packages. Because of this, the consumption has increased; and until the stimulus packages are exhausted, these prices will not come down.
On steel demand, Sharma said in the calender year 2020, the entire world has seen a slump except for China which recorded a growth of 6-7 per cent.
While, the Indian steel industry recorded a negative growth of 10 per cent at 99 million tonne (MT).
“The all-India data is yet to come. But, in my view, from April 1, 2020 to March 31, 2021, we are at a level of minus 4 per cent…we have made around 104 MT of steel against expectations of 112 MT. However, these are the rough observations,” he said.
In the current financial year 2021-22, the demand for steel will remain high. This year, domestic demand will be at 140-150 MT, while the production is expected to be somewhere around 125 MT.
“This year, that should be the highest production ever. The demand for steel will be more than the production of steel for sure,” he said.
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