...to hold ground through this quarter

After a brief cooling period during July-September, domestic steel prices have resumed their run-up in October, with major steelmakers increasing the price of flat steel by Rs 1,500-3,000 per tonne. Long steel price also rose by Rs 3,000 per tonne in the first week of this month, led by higher coal prices and healthy demand.

Importantly, despite this material increase, domestic flat steel is priced at Rs 10,000-12,000 per tonne, lower than global landed prices. China hot-rolled coil (HRC) FOB (free on board) price was around $980 per tonne in September, which kept domestic prices up.

Put another way, there is room to raise domestic prices further, and a correction this quarter appears unlikely as prices are likely to hold. Rising raw material prices in China and the expected coal/ power shortage will potentially weigh on the earlier anticipated price correction.