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

Indian state-owned steelmaker, Rashtriya Ispat Nigam Limited (RINL) or Vizag Steel has rolled over prices for all of its long steel products for June deliveries. 


In May, the company reduced its rebar prices by Rs1,000/mt amid a sharp fall in domestic demand and stockpiled inventories, as per Davis Index sources.


The company is currently operating at around a third of its capacity and is producing 6,500mt of hot metal per day. RINL’s three blast furnaces together have a daily production capacity of 21,000mt of hot metal. 


The company is known for its long products and caters to the construction, manufacturing and automobile sectors. RINL more than doubled its capacity to 6.3mn mt in April 2015 at an estimated cost of Rs122,910mn. The capacity was then increased to 7.3mn mt. 


Primary mills including RINL have been actively exploring the overseas markets amid COVID-19. This reliance on the export market, particularly China, could continue for the next few months until the domestic demand revives. Demand is expected to recover by the third quarter of the year ending December.  

Input cost a deciding factor 

International iron ore prices have increased to $99/mt cfr China from $85/mt in the first week of May. Prices rose amid anticipation of declined supply from Brazil along with healthy demand from China. 


On the other hand, premium low volume hard coking coal prices are at $108/mt fob Australia, down from $131/mt level in the last week of April. Prices declined on the back of a substantial fall in steel output in major producer countries due to the COVID-19 pandemic. In the upcoming quarter, this could help large steel players increase their margins. 



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