Steel Price Rally under Threat On Global Supply Revival

The surge in global steel prices may be under threat as output increases across the world and top producer China steps up exports, according to India’s biggest steelmaker by market value. Steel rebar and hot-rolled coil future

BY Realty Plus
Published - Friday, 29 Jan, 2021

Steel Price Rally under Threat On Global Supply Revival

The surge in global steel prices may be under threat as output increases across the world and top producer China steps up exports, according to India’s biggest steelmaker by market value. Steel rebar and hot-rolled coil futures have jumped by more than 30% in the past year in China, driven by robust local demand and as iron ore prices rallied to multiyear highs. However, China’s steel rebar and iron ore inventories have both turned higher, signalling that construction activity may have eased amid expectations that government spending on the sector may be reined in following a recovery in the economy from the pandemic. Steel prices will be healthy for about two more quarters, after that when more and more supplies come in from the rest of the world and China increases its exports that is the time you will see pressure on prices. Higher production costs are also a worry as iron ore prices may not correct much in the short- to medium-term and the recovery in demand for coking coal will also push up prices of the key ingredient, as per the steel industry.