Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

After concentrating on exports during the COVID-19 lockdown period, the Indian primary steel mills are focusing back on the domestic market as demand from various sectors such as infrastructure, construction activities, solar packaging, appliances, capital goods industry, engineering and capital goods industry has started improving. 


Export of steel will be moderated in the ongoing and upcoming quarters. With the Indian market opening up and lockdown being relaxed by the government, a boost in domestic sales is expected.


Large government projects are progressing and demand from the rural markets is increasing. With workers coming back to work in metro cities, construction activities have gained momentum.


Sail and JSPL

Recently, steelmakers Steel Authority of India Limited (Sail) and Jindal Steel and Power Limited (JSPL) reported impressive sales figure for July which reflecting the surge in demand from domestic market. 


Sail registered sales volume increase of 50pc in July 2020 to 1.58mn mt, compared to prior year period, of which domestic sales accounted for 1.27mn mt and exported around 0.31mn mt.


JSPL’s standalone sales volume increased in July by 29pc to 637,000mt compared to prior year period. Out of this, 39pc came from the exports. 


Steel prices stay bullish

Primary mills have started raising steel prices from end of July onwards in-line with the rise in international market. Almost all primary mills have raised steel prices by Rs1,000-2,000/mt in both, long and flat products. 


Following price hike by primary mills, HRC and rebar prices are now at around Rs39,000/mt ($520.97/mt) and Rs38,000/mt ($507.61/mt) respectively ex -Mumbai (GST extra). 


Export price for HRC is hovering around $470-480/mt FoB India which is lower than domestic prices. This also indicates that mills will get better realisation in domestic market rather than in export.


Sail officials told Davis Index that increase in prices in domestic market is more likely to sustain in the domestic market on the back of steady rise in demand. The COVID-19 situation in North India, especially in Delhi, is showing improvement which will help improve the market.


($1= Rs74.86)


CompaniesSteel productionexport share in Q1Export target in Q2
Tata Steel2.9950pc30pc
JSW Steel2.9657pc

Leave a Reply

Your email address will not be published.