ICRA Cut Steel Price Forecast for FY24
The steel prices have been witnessing decline since the beginning of FY2024.
SEATTLE (Scrap Monster): Leading ratings agency, ICRA Limited revised its baseline steel price forecasts for FY2024. The revised latest report by the agency predicts 4.5% year-on-year decline in domestic hot rolled coil (HRC) prices, contrary to its earlier prediction of 1-2% rise in prices.
The steel prices have been witnessing decline since the beginning of FY2024. For instance the domestic HRC prices have plunged by almost 38% during the current quarter, primarily due to dip in Chinese exports.
According to ICRA, the domestic steel demand registered a strong growth of 7.2% during April this year, very much in line with the full-year growth projection of around 7-8%. However, the chances of substantial price recovery in the near future looks dull, in the midst of external headwinds.
Jayanta Roy, senior vice-president & group head of corporate sector ratings at ICRA noted that the steel industry started 2023 on a positive note, mainly driven by reopening of Chinese market after pandemic and subsequent recovery in steel demand. However, the current market conditions poses challenges to steel market in the near future. The demand surge seems to have lost momentum, he added.
ICRA noted that domestic HRC prices are currently trading at a premium of $ 50/MT, in comparison with Chinese imports.