Steel prices have continued to run-up trading at all-time highs in Chinese markets and the Indian prices do take sense in what is happening globally. Prices have gained up by 10 percent in this calendar year and the market suggests that there is further room on the higher side for the steel prices.
Sandeep Kalia, principal analyst at Wood Mackenzie, spoke to CNBC-TV18 on global steel production and prices moving to historic highs.
Talking about steel as a sector, Sandeep Kalia said, “Steel as a sector has started coming back to normalcy levels since the second half of last year. In fact, during the year 2020 the World ex-China crude steel production was down by 8 percent. We feel the momentum has continued in China and India as well and probably China will touch its peak steel production in the current year 2021.”
On steel prices, he further added, “Steel prices at this point of time are at historic highs I would say, but we do expect some sought of softness going forward in the steel prices. The reason for that is the supply position for iron ore which is the main commodity for steel making and China importing close to a billion tonne of iron ore per annum the supply situation on the iron ore front is going to increase in the rest of the year 2021.”
“As far as the steel prices are concerned, Indian steel prices are governed by the global steel prices and we do expect some sort of softness in the global steel prices especially from the second half of this year given the ease out in the iron ore supply position leading to a decline in the raw material costs thereby declining the steel prices”
On Indian steel production, he said, “Our current forecast as far as the Indian steel production is concerned it is about 12 percent increase over 2020.”
For full interview, watch accompanying video...