ICRA in its latest report has said that domestic steel prices are likely to come under pressure in near-term owing to the outbreak of deadly coronavirus. The report mentioned that after touching a low of Rs 32,250 tonne in the first week of November 2019, domestic hot-rolled coil (HRC) prices have been on the rise and are currently ruling at around Rs 37,000 tonne, a rise of about 15 percent.
It further said following the coronavirus outbreak in China, the export HRC (hot rolled coil) prices have witnessed a 6 percent fall since mid-January due to a slowdown in China's steel consumption, leading to weaker economic activities. The export HRC prices were at $496/tonne in January 2020 as compared to $428/tonne at October-end 2019.
Besides, ICRA’ Corporate Sector Ratings -- Senior Vice-President & Group Head Jayanta Roy said Domestic steel prices are currently trading at a discount of 7 percent to landed cost from China and at a discount of 3 percent to landed cost from Japan. While this provides a headroom to domestic steelmakers to increase steel prices, but rising number of confirmed cases of coronavirus in India also remains a concern, and the same along with continuing macroeconomic headwinds, could affect domestic steel consumption and pressurise steel prices in the coming months.