Sharp increase in steel prices : There is a sharp increase in steel prices across the world including India. The pace of economic activity after the second round of Corona transition has created a huge increase in the price of steel in the international market. This can be a good opportunity for Indian steel companies to make profits as China has ended the exemption given to the export of its steel industry. The prices of iron ore are increasing rapidly in China and due to this the price of steel is increasing.
China also wants to cut exports to save its domestic manufacturers from costly steel. Along with this, he wants to achieve the target of carbon neutrality by 2060, so he wants to curb the pace of steel production and its export. Recently, China has also reduced import duty so that more steel can come from outside. So far, China has been one of the largest players in the world’s steel market. But by decreasing its steel exports, companies of other countries of the world including India can get an opportunity to make profits in the international market.
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Steel prices in India more than double in a year
Steel prices in India have almost doubled compared to last year. In June 2020, the price of flat steel in the country was Rs 38 thousand per tonne but by June 2021 it increased to Rs 72,000 per tonne. Long steel prices have increased almost one and a half times to Rs 57,900 per tonne. Due to the increase in the price of steel, the price of vehicles in the domestic market has increased by about nine percent. But there is an opportunity for India to make profits in the international market as well.
Indian steel companies will increase production capacity
In view of the possibility of reducing the pace of steel exports from China, steel makers around the world have increased their production. India’s JSW Steel has said that it wants to increase its capacity to 45 million tonnes by 2030. Malaysia, Indonesia and other Southeast Asian countries are also targeting an additional production of 60 million tonnes.
Profit making opportunity for Indian companies
Analysts believe that this time there is an opportunity for steel companies outside China to make good profits. The prices of steel in the international market have increased very rapidly. If Indian companies increase their exports, they can make huge profits. This is the reason why big Indian steel producing companies like SAIL, Tata Steel and JSW Steel have started preparing to increase their capacity. Steel prices in the international market will continue to rise this year due to the plan to spend a lot on infrastructure in the US. The demand for steel will be very high in the European market as well. This can benefit major international companies like Nucor Corp, US Steel Corp, SSAB AB and ArcelorMittal SA. Indian steel companies can also join this race for profits.