Steel prices are expected to remain high in 2021, fuelled by higher demand, which will affect core inflation and also keep WPI inflation at elevated levels.

Strong domestic demand, along with healthy exports, aided the steel industry‘s production and sales growth in the fourth quarter of 2020-21 on a sequential basis, said analysts.

Revenues of steel companies are expected to improve 20% quarter-on-quarter and 45-50% from a year ago on higher realization and rising demand, led by a recovery in capital expenditure of states, auto production, white goods production and real estate construction.

“Steel companies are expected to post a whopping 45-50% y-o-y increase in revenue, led by rising realizations (27% y-o-y increase) and healthy demand in the fourth quarter of fiscal 2021 on the low base of last year (sales and production by steelmakers were impacted in the last two weeks of March 2020 due to the lockdown),” said Crisil Research in a report on 8 April.

Steel industry set to report record sales growth in 2021 Q4

The top five steel manufacturers — Tata Steel, JSW Steel, Steel Authority of India Ltd (SAIL), Jindal Steel & Power Ltd and AM/NS India (formerly Essar Steel) — account for about 55% of India’s installed capacity.

Domestic prices of flat steel are estimated to have increased 32% in the fourth quarter from the year-ago period and are expected to remain elevated over the coming months.

  • Revenues are expected to improve 45 – 50% y-o-y on higher realization and rising demand

“Steel prices in the world are at an all-time unprecedented high due to steep increase in the prices of iron ore as well as due to the strong growth in steel demand from China, India, US, Europe and other emerging markets, as global markets recover from a year-long slowdown with the reopening of business activities and vaccination drive,” according to a report by Care Ratings on 30 March.

Hot rolled coil (HRC) prices are expected to rise by at least ₹3,500- ₹4,000 per tonne in April 2021. A ₹4,000 a tonne hike will take domestic HRC prices to ₹59,000- ₹60,000 per tonne—the highest since 2008.

Firm international steel and iron ore prices, along with strong demand from China, US and Europe are driving international steel prices, and have prompted domestic steel makers to raise prices since H2FY21.

Source for ‘Steel industry set to report record sales growth’: livemint.com/news/india/steel-companies-set-to-report-record-numbers-in-fourth-quarter-11617973073797.html