Steel prices fell about 40 per cent to ₹57,000 a tonne in the domestic market over the last six months on subdued export orders in the wake of the 15 per cent export levy, PTI reported quoting SteelMint data.
The steel prices in the domestic market peaked at ₹78,800 per tonne in April. After an 18 per cent GST levy, the price was about ₹93,000 per tonne, the report said.
The prices started to fall from April-end and came down to ₹60,200 per tonne towards the end of June. It continued to fall in July and August and came down to ₹57,000 per tonne by mid-September, according to SteelMint data.
SteelMint cited "government tax on steel products, subdued overseas demand and high inflation and energy costs" as the reasons for the fall in steel prices.
On the outlook, it said domestic HRC prices to remain range-bound in the next quarter. As steel exports are likely to remain less than usual and inventory pressure is likely to sustain, mills are unlikely to increase the prices over the next two months.
On May 21, the government imposed a 15% export duty on a range of finished steel products. In other steel categories, an export duty of 15% has also been levied on pig iron. On the raw material side, the government has increased the export duty by 58% and above Fe grade iron ore fines and lumps from 30% to 50%.
After the duties were imposed, Rating agency firm CRISIL said that duty hikes will lead to falling in steel exports by 35-40% to 10-12 million tonnes this fiscal.
While the decline in steel prices has pushed the margins of the auto industry, which in Q1 was hampered by high commodity prices.
On the other hand, Steelmakers hoping for an early end to the export duty may have to wait till next year’s Union budget, with the government deciding to examine the metal’s price trend over an extended period before removing the levy, Mint reported.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.