Pointing to a significant jump in the FOB prices of steel products entering India compared to 3-4 months ago, Sushim Banerjee, Director General, Institute for Steel Development & Growth (jointly promoted by the Ministry of Steel and steel producers), said this trend has affected the domestic prices of steel in all the countries globally, including India.
However, he hoped this inflection point is sustained within the country for another six months.
Illustrating the price hike, Banerjee said Chinese hot rolled coils, in the month of November were being offered to Indian buyers at $265 per ton FOB China. Today, that same coil, SS400, is being offered at $460 per ton. This is a jump of about $190 per ton within a period of three months.
Similarly, rebars being offered by Turkey at $217 in November-December, 2015, are now available at $445 per ton.
He also said there is currently a growing sentiment among traders and merchant groups globally that they have reached the end of the inventory accumulation period and a time has come for inventory build-up.
According to Banerjee, this trend is being perceived all over the world and particularly in China where steel consumers are actually buying steel not for immediate consumption but for the next 5-6 months. “This trend is due to the fact that, when prices start going up, people think today’s price is the cheapest and they buy. When prices are down, people think they should wait for prices to fall further! This is how market sentiment behaves,” Banerjee observed to ISMW.