Steel makers across all parts of globe, citing surge in costs of iron ore and coking coal, have hiked steel prices in last 3 months leaving steel users in lurch. Now the big question is that weather the hikes are sustainable ie to what extant steel makers would be able to pass the higher costs to buyers and what would be the steel price scenario in April to June quarter.
While the global miners remain upbeat on prices of iron ore and coking coal in April to June quarter, several factors are weighing heavily on steel prices.
Chinese premier has recently emphasized that the government will take all measures to cool down economy. This is being reflected in Chinese domestic prices, which have been sliding every day since February 22nd 2011. Political unrest in Middle East and North Africa has compounded the problem as many of the captive export markets for Black Sea based and Turkish mills have suddenly vanished creating a vacuum, forcing them to find alternate destinations.
Since mid of February the wind, that was till then strongly blowing towards generally applied price increases, has progressively changed direction and during last days it seems having substantially changed directions.
While billets and long products prices had started to weaken in the 2nd half of February, recent reports from Europe reflect starting of correction for flat products as well. Different Mills, including Russian ones, have decided for cutting down their respective official quotations for hot rolled by EUR 20 per tonne to EUR 30 per tonne.
However these cuts have not been able to lift any interest from buyers. On the contrary, the sensation that a U turn in the price trend is about to happen it's now spreading around the market.
How all these developments affect domestic prices in India in coming times?
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( Source: www.steelguru.com )