Indian steel prices to be stable as Chinese output likely to rise

China is planning to ease emission restrictions on steel producers, which is expected to raise output and soften prices across the globe including India.

On Monday, the environment authority of Tangshan, the world’s largest steel-producing city, discussed easing of production curbs for local steel mills, international media reports said.

Analysts said the development would reduce the scope of increasing steel prices.

A source in a steel company said manufacturers still want to raise prices. “Each event may or may not have impact on prices. However, such news creates nervousness in the market. Manufacturers are wanting to increase and most likely would announce some increase,” the source told Moneycontrol.

Kunal Shah, head of Research, commodities, Nirmal Bang, said supply would increase. “In the coming days, China will ease curbs for softening steel prices, and mines which are closed due to COVID are also opening up slowly, which also increases supply in the market. However, domestically prices are in discount in comparison of international market. Steel price will not drop but scope of increasing price is also limited,” he told Moneycontrol.

Morgan Stanley report on Monday said domestic steel companies were planning to increase prices soon. “Our channel check indicates flat product price hike of Rs 3,250 per ton for HRC, Rs 5,000 for CRC/GP and Rs 10,000 for Colors-coated products likely during the first week of June,” the report said.

Domestic prices are at a 5 percent discount to Chinese prices.