Weak trend likely to persist in near term

Domestic steel prices have slumped to a five-year low, trading in the range of Rs 47,000- Rs 48,000 per tonne impacted by multiple factors, including surging imports, as per market data from BigMint.

Hot rolled coil (HRC) prices are hovering around Rs 47,150 per tonne, while re-bar (TMT) is quoted in the range of Rs 46,500-47,000 per tonne in the wholesale market.

The last time prices were at such levels was in 2020, when HRC was trading at Rs 46,000/tonne levels and rebar at Rs 45,000/tonne amid the pandemic slowdown.

The current decline is largely attributed to weak export demand, rising imports, and an oversupply in the global market. 

India's steel exports have fallen sharply, pressured by aggressive export pushes from countries like China, while imports are still active, despite several measures introduced by the government.

Falling prices amid rising imports is a matter of concern as inbound shipments are increasing despite several measures introduced by the government.

Taking a note of the situation, the Ministry of Steel has called for an "open house" to discuss issues related to steel imports with industry stakeholders on October 27 in the national capital.

The RBI has also noted that steel imports have seen a surge, largely driven by lower import prices. It has also called for policy support to boost the competitiveness of domestic steel production.