Business Desk, ETV Bharat: Thanks to a host of factors ranging from raw material shortages to strong demand in key foreign markets like China, steel prices in the country have hit the roof. As per a recent report from the Motilal Oswal Institutional Equities, domestic steel prices have touched an all-time high of Rs 57,250 per tonne recently. As per an estimate, prices of hot roller coils and primary rebar have gone up by Rs 12,000 and Rs 15,500 per tonne respectively during the last October-December period.
Soaring demand from China
One of the reasons for an upturn in the steel sector is the rising demand in China. The country's December 2020 trade data exhibits a normalization of the steel trade as net steel exports turned positive on a year-on-year basis for the first time since the onset of the pandemic.
"China's domestic steel prices remain strong and are at nine-year highs which we believe should provide a cushion to regional and Indian steel prices (at lifetime highs)," Motilal Oswal said in its report on the steel sector.
Apparently, the dream run for metals may well continue in the coming months as targeted stimulus in China will continue to prop up demand.
The Odisha Factor
Besides the strong global demand for Indian steel, supply-side issues in Odisha, which accounts for about 55 per cent of the country’s total iron ore production, have propelled the prices.
“On the raw materials front, domestic iron ore supply could not match demand from steel mills as only 6-7 of the 19 auctioned mines in Odisha could begin mining operations,” Crisil research report said on Monday.