A number of Indian steel makers are anticipating a second straight price hike in October, along with increased cost for coking coal and other raw materials.
According to a report from the Business Standard, Essar Steel, JSW Steel, Steel Authority of India (SAIL) and Jindal Steel & Power are among the steel producers bracing for the price hike in the coming month.
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“Our (domestic steel industry) current product pricing scenario is unable to support costs and hence a price hike is inevitable in October,” Ravi Uppal, chief executive officer at Jindal Steel & Power, told the Business Standard. “At prevailing products prices, steel companies will continue to post negative results.”
Meanwhile, coking coal prices have doubled sing the beginning of August and are expected to stay volatile for the foreseeable future, the news source stated.
“Coking prices have risen significantly since the last couple of months and so we will have to pass on the cost of production hike to customers,” Jayant Acharya, director-commercial at JSW Steel, told the Business Standard.
Chinese Producers Suffering
Our own Stuart Burns wrote earlier this week that with 1.2 billion mt of crude steelmaking capacity, but 803 mmt of steel production, China has a surplus of unproductive capacity and many of its producers are looking to merge and consolidate the poor performance.
“But, for Beijing, it is as much a desire to clear up these loss-making companies before the market pulls them down into bankruptcy than it is to cut excess steel capacity,” Burns wrote.
How will steel and base metals fare for the remainder of 2016 and into 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: