Indian Steel Prices Likely to Surge on Improved Demand - Real Ispat & Power Ltd

Domestic steel prices in India are expected to increase on the back of improved demand and it's expected that rebar prices in Raipur may continue uptrend till end of this fiscal, said Mr Ramesh Agrawal - co-founder & Director of Real Ispat & Power Ltd. Considering the peak season and strong quarter in terms of sales in projects, it is expected that by Mar'20 the price levels would increase however chances of sharp hike remains less, he added.

Hopeful on infrastructure allocations in upcoming Budget - Sharing his expectations on upcoming Budget he said that increased govt allocation for infrastructure are expected to keep Indian steel demand on higher side. However faster execution of projects will facilitate existing projects and 'ease of doing business' along with establishment of new industries will boost India's per capita steel consumption. Also in last one year time span, Indian secondary rebar mills are actively competing with primary mills in govt backed projects of highways, railways, defence sector etc.

Expansion plans in the pipeline - Central India based units have their expansion plans in pipeline for coming years, both organic and inorganic, whichever works best at the moment.

Domestic iron ore prices less likely to increase further - Mr Agrawal also mentioned that domestic iron ore prices in India may not observe sharp hike from present levels as few plants have already done enough of iron ore stocking expecting a supply disruption from ongoing Odisha auctions 2020. However iron ore imports doesn't seems feasible for central India based units as the units located here are dependent on NMDC (Chhattisgarh), pellets (from Raipur and nearby locations) and Odisha iron ore. Thus there are less chances of impact of supply disruption to central India units as compared to eastern India based plants who primarily depend on Odisha for iron ore sourcing.

Increasing CIL output may lower imports - Sharing his views on coal linkages he commented that dispatches from CIL to non-power sectors have been pending from quite a long time. Considering betterment of Indian steel industries, dispatches should be expedited. With India's increasing domestic output, central India based units may shift their dependence more on souring from CIL than importing coal.

Real Group is an integrated steel maker located in central India having captive sponge iron plant with a capacity of around 0.36 MnT pa along with steel melting shop, rolling mill, wire drawing mill and power plant units. Company has rebar & wire rod capacity of 0.7 MnT pa.