Steel prices fall 10%, coal crisis destroys secondary steelmakers

Steel players are facing some heat due to high input prices as steel prices, which ended in April after the start of the Russia-Ukraine war, began to fall.

In the Kolkata market, the price of the long product segment has declined by an average of 10-15 per cent to Rs 57,000 per tonne. Coal, a key raw material for secondary steel producers, has become a major problem, officials say.

The maximum price of steel from the top players was Rs 75,000-76,000 per tonne.

Vivek Adukia, chairman of the Steel Rolling Mills Association, told PTI.

“Despite compromising on input quality, our costs have risen by 50 per cent. Secondary steel producers need high quality thermal coal to produce sponge iron using direct reduced iron (DRI). The price of imported coal was 120 USD per tonne. 300 300. The price is not sustainable unless it is exceeded, “he said.

“The price of steel in the last two years has finally set to correct in the weak season and by the end of the current financial year, it could be trading at Rs 60,000 per tonne. Said in the latest report.

A PSU steelmaker, without elaborating, said there had been some relaxation in steel prices.

“Demand has increased in the post-Covid period due to huge spending by various governments. At the same time, supply has not increased. So there is a reason why we have seen so much increase in steel prices. Now we are seeing. Slight correction in steel prices,” 6 commented at the award ceremony

However, he said that one wonders whether the price of steel has gone up.

Tata Narendran MD and CEO TV Narendran, however, took a different view and recently expressed concern over the first quarter (FY’23) of this year, Because it will cover the cost increase we are facing. “

According to Kaustav Majumdar, an associate director of the company, the onset of weak demand season due to monsoon and low profit margins mean that domestic steel prices will start falling and finally reach Rs 60,000 / ton by March 2023, a maximum scale of Rs 76,000 / ton last month alone. Which will still be above the pre-epidemic level.

Adukia said steel companies are now being forced to import coal to survive because Coal India is not listening to their demands.

“Since Coal India is not listening to our plea that coal is a key raw material and not for fuel and therefore should be considered as our priority sector. We have approached the state government on our behalf to speak to the city headquarters mines.” Dr. Adukia.

“If the price of coal in the international market does not come down, 30-40 per cent of secondary steel units will have to reduce production or shut down. There are about 65 secondary units in West Bengal and about one lakh jobs are involved.” He said.