Steel prices set to rise further as Ukraine-Russia conflict hits supply chain: report

According to ICRA, domestic steel demand is expected to grow 7-8% in FY2023 after an estimated 11-12% growth in FY2022

According to ICRA, domestic steel demand is expected to grow 7-8% in FY2023 after an estimated 11-12% growth in FY2022

According to industry consultancy SteelMint, the price of steel will continue to rise due to “good demand” and the continued disruption to the supply chain from the Ukraine-Russia conflict.

Prices in the international market have risen by about $135 a ton and have been rising since the conflict began last week in February, SteelMint founder and CEO Dhruv Goel told PTI on Tuesday.

“In the domestic market, hot rolled coil (HRC) prices were in the range of ₹68,000-69,000 per ton in the first week of March versus ₹65,500-66,500 in the previous week; while cold rolled coils (CRC) were £73,000-74,000 a tonne compared to £71,000-72,000 a tonne the previous week, he said.

“The conflict has affected both the movement of raw materials and goods. There is good demand for steel. We expect these two factors to continue to improve prices,” he said.

According to industry sources, before the start of the conflict between Russia and Ukraine, the price of oil was $90 a barrel. Prices are now trading near $120 a barrel and there are forecasts that they would reach $180 a barrel in a few days.

As oil prices have risen, cargo ship freight rates, currently at $20,000 per day, are likely to reach $30,000 per day.

Coal prices are also rising. Coking coal has crossed $550 a ton from $250 a ton before the crisis began.

India imports 85% of its coking coal needs.

Besides coking coal, iron ore is another important raw material for steelmaking companies in India.

According to ICRA, domestic steel demand is expected to grow 7-8% in FY2023, based on an estimated 11-12% growth in FY2022, supported by the government’s extensive plans for infrastructure spending.

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