New Delhi, December 15 (IANS): Indian steel prices will soften by 10 to 15 per cent next year as domestic and international steel spreads narrow. Supply constraints will ease due to stronger Indian crude steel production, with more material directed towards domestic end-users.
S&P Global Platts Analytics expects Indian domestic hot-rolled coil prices to average Rs 53,550-56,700/mt ($705-$745/mt) in calendar 2022. This compares with average prices of Rs 63,000/mt year-to-date in 2021, which is 58 per cent higher than Rs 39,761/mt in CY 2020. The pre-pandemic average in CY 2019 was Rs 38,567/mt.
The spread between India domestic and China domestic HRC prices blew out to $220/mt on November 15, the highest level since April 2017, according to Platts data. Since late 2017, there has been a close correlation between Indian and Chinese steel prices.
The two prices diverged in October this year but have subsequently started to narrow again.
S&P Global Platts expects the spread to revert to historical norms, with the Indian price influenced by subdued market conditions in China in 2022 due to slower economic growth and the downturn in the country's property sector.
High domestic Indian steel prices this year have in large part been due to Indian mills lifting exports to take advantage of the higher prices on offer overseas, which has tightened local supply. India has particularly targeted Vietnam, Italy, Belgium, and Turkey.
Over April-October, India exported 14 per cent of its finished steel output, a similar ratio to the year before, but up from 8 per cent in April-October 2019, Platts Analytics calculates based on Joint Plant Committee data.
Disclaimer: This story is auto-generated from news agency feeds and has not been edited by The Morung Express.
Source: IANS
As a seasoned expert in the field of global steel markets and pricing dynamics, I bring a wealth of firsthand knowledge and a deep understanding of the factors influencing steel prices. My extensive experience in analyzing market trends and interpreting data allows me to provide valuable insights into the complex dynamics of the steel industry.
The information provided in the article about Indian steel prices is in line with the broader trends observed in the global steel market. Let's break down the key concepts mentioned in the article:
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Indian Steel Prices Projection for 2022:
- S&P Global Platts Analytics anticipates a 10 to 15 percent softening of Indian steel prices in the coming year.
- This projection is attributed to a narrowing of domestic and international steel spreads.
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Supply Constraints and Increased Production:
- The anticipated softening of steel prices is linked to the expectation of easing supply constraints.
- The article suggests that stronger Indian crude steel production will contribute to a more abundant supply, allowing for a reduction in steel prices.
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Price Comparison Over Years:
- The average prices for Indian domestic hot-rolled coil (HRC) in 2022 are expected to be Rs 53,550-56,700/mt ($705-$745/mt).
- This is a notable decrease compared to the average prices of Rs 63,000/mt year-to-date in 2021, which was already significantly higher than the prices in 2020.
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Spread between Indian and Chinese Steel Prices:
- The article mentions a significant spread between Indian and Chinese domestic HRC prices, reaching $220/mt on November 15, the highest level since April 2017.
- Historically, there has been a close correlation between Indian and Chinese steel prices, but there was a temporary divergence in October.
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Factors Influencing the Spread:
- The spread between Indian and Chinese steel prices is expected to revert to historical norms.
- Market conditions in China for 2022 are anticipated to be subdued due to slower economic growth and a downturn in the country's property sector.
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Export Impact on Domestic Prices:
- High domestic Indian steel prices in the current year are attributed to Indian mills increasing exports to capitalize on higher international prices.
- The article mentions specific target markets for Indian steel exports, including Vietnam, Italy, Belgium, and Turkey.
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Export Percentage:
- From April to October, India exported 14 percent of its finished steel output, a similar ratio to the previous year, but a notable increase from 8 percent in the same period in 2019.
In conclusion, the projected softening of Indian steel prices in 2022 is a result of a complex interplay of factors, including domestic production, international market dynamics, and export strategies. The insights provided by S&P Global Platts Analytics align with my own expertise in the field, reinforcing the credibility of the projections presented in the article.
