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

A surge in metal and commodity prices has raised several concerns in the user industry, says KK Pahuja, President, Indian Stainless Steel Development Association (ISSDA). For the SS sector, raw material prices have surged too and now finished SS prices have started to climb. 


Downstream bodies have already urged the Ministry of Steel to impose a temporary ban on steel export to regulate steel prices. 

In the Union Budget of FY22, the government suspended Countervailing Duties (CVD) on imports of stainless steel flat products from China which was in place since September 2017. Issda has repeatedly urged the government to remedy the situation. Most stainless steel producers in India pertain to the MSME sector which suffers the most with the dumping of SS products from China and others.


The CVD on imports of stainless steel flat products from Indonesia was also reversed within six months of its imposition in October 2020. These duties were based on detailed investigations of Directorate General of Trade Remedies (DGTR) that proved non-WTO compliant subsidies in these countries, leading to substantial injury to the Indian domestic industry. Stainless steel-producing countries across the world have either imposed or initiated trade remedial initiatives against China and Indonesia for the same reason, noted Issda. 


Issda added that the Indian industry is facing multiple trade cases in Europe and USA while Indian government has allowed free imports from dumping countries like China and Indonesia. 


According to ISSDA, during July 2020 – April 2021 period, benchmark stainless steel cold rolled coil 304-grade price spiked by 33pc in the USA and 55pc in Europe. During the same period, Indian prices rose only by 26pc while prices continued to rise in other countries. SS prices in India have been relatively stable since February 2021 onwards, however, prices are since increasing due to the withdrawal of exports rebate in China with effect from May 1.


With China’s huge appetite for metals, prices touched multi-year highs including prices in India said ISSDA. Steel and stainless-steel prices follow global price trends. KK Pahuja says that International stainless-steel prices are mostly driven by strong Chinese demand. 

The raw materials used in production of stainless steel are scrap, ferronickel, ferrochrome, and copper. Since the beginning of the commodity cycle in July 2020, prices of SS scrap rose by 48pc, MS scrap up by 69pc, , Nickel by 39pc, Ferro Chrome rose 34pc, and copper by 54pc, according to data released by Issda. These raw materials account for over 70pc of the cost of the final product, and most of them are imported owing to domestic unavailability shared Issda. 

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