Domestic steel consumers are feeling the pinch as steel prices remain bullish since last couple weeks. Steel prices have increased by 15pc in the international market. Subsequently, manufacturers are making finding it profitable to export, but those dependent on domestic market are feeling the heat because of low availability of raw material and soaring steel prices.
Ingot prices in Mandi Gobindgarh since August 1 rose by Rs1,550/mt to Rs33,100/mt till date, the rise in prices are directly affecting steel consuming industries such as bicycle, fastener, auto parts , sewing machine , machine tools, hardware and hand tools, also the construction sector .
Scrap prices in Mandi Gobindgarh rose in line with ingot price and secondary manufacturers were forced to increase their price as they are dependent on domestic scrap.
Steel prices in China are also increasing, leading to a surge in demand for iron ore. Suppliers are selling to China at higher rates. Chinese steel prices were higher than India for the first time, said Badish Jindal, president of Federation of Punjab Small Industries Association (FOPSIA).
All major steel mills have already increased prices by Rs2,000-4,000/mt, which is expected to go further up. Government had imposed anti-dumping duty on imports of certain types of steel products from China, Vietnam and South Korea for five years, a move that is helping domestic steel prices.
According to Davis Index sources, mills are now focusing on using sponge iron as a primary raw material due to low availability of scrap. They are also requesting the government to ban export of iron ore pellet as it’s pushing domestic steel prices up.