In the coming years, steel prices are likely to be much higher than recent gains, the CEO of Tata Steel, one of India's largest steel producers, predicts.
Tata Steel CEO, Mr. T.V. Narendran said that over the past 8 years, the average price of hot rolled coil has fluctuated in the range of 400-450 USD/ton. But this price in the coming years may exceed 600 USD/ton. Currently, China and Southeast Asia are two markets that have recorded skyrocketing prices, at $750/ton and $850/ton, respectively.
"I expect steel prices to stay in that range, of course there will be fluctuations, but fluctuations could be higher than we've seen in the past," said T.V. Narendran predicted.
Explaining the spike in steel prices in the near future, Tata Steel CEO said that the steel market is experiencing some big fluctuations, notably the rising production costs and the role of China. in the world steel market has changed.
"The steel market in the past 10 years has been dominated by export supplies outside of China. But now, the world's steel trade has been much more stable," said Mr. T.V. Narendran said.
Tata Steel CEO said that at its peak, China exported more steel than India produced. But since then, China's steel exports have halved to around 60 million tonnes a year and could fall further as the country pursues its net carbon emissions target.
A representative of Tata Steel said that for the first time in many years, steel demand is not driven by the Chinese market; also cited the forecast of the World Steel Association that this year's steel consumption growth will come from other countries, but not China.
"With the West investing heavily in infrastructure, that also creates a positive impetus for steel demand," said Mr. T.V. Narendran for example.
Notably, last week US President Joe Biden signed into law a bipartisan proposed infrastructure investment law worth more than $1 trillion.
On the supply side, input costs for steel production are at a "record high" due to soaring coal prices. However, CEO Tata Steel said that iron ore prices have somewhat declined and will trade at the threshold of 100 - 120 USD/ton in the long term. Both coal and iron ore are important raw materials for steel production.
Tata Steel's side predicts that steel prices may be pushed higher if the cost of carbon in Europe is increasing. "I think the price of steel in the next 10 years will be much higher than what we have seen in the past 10 years," Mr. Narendran said.
Le Quan (baodautu.vn)