Steel prices could be much higher in the coming years, says TV Narendran, the chief executive of Tata Steel. He told CNBC’s Street Signs Asia that in the last seven or eight years, the average price for hot-rolled coil steel was around $400 or $450 per metric ton.
Narendran predicted that the long-term average over the coming years is likely to be more than $600. “Prices were $750 in China and $850 in Southeast Asia on Friday. I expect it to be in that space and that range – fluctuating of course, but fluctuating at a higher level that we have seen in the past.”
The executive pointed out that the steel market is going through several changes, including rising costs and China’s evolving role in the market. “The last 10 year have been dominated by exports out of China. Now, there’s far more stability in the world steel trade,” he said. “At its peak, China exported more steel than India produced. China’s steel exports have since halved to around 60 million tons a year, and could fall further as the country pursues its net-zero carbon emissions goal.”
Narendran noted that for the first time in many years, steel demand is not being driven by China. The World Steel Association expects growth in steel consumption this year will come from countries other than China. “With the Western world investing in infrastructure, that’s positive for demand as well.”
Market fortunes, as per The Steel – Global Market Trajectory & Analytics report, of finished steel products market depend on health of key end-use markets such as construction sector, automobile and automotive component manufacturing, metal goods fabrication, ship building, machinery manufacturing, oil & gas infrastructure, among others.
Also Read: Amazon probed for alleged smuggling of marijuana through e-commerce network
Amid the COVID-19 crisis, the global market for Steel estimated at 1.7 billion metric tons in the year 2020, is projected to reach a revised size of 2.2 billion metric tons by 2026, growing at a CAGR of 4.1% over the analysis period. Construction, one of the segments analyzed in the report is projected to grow at a 3.5% CAGR to reach 992 million metric tons by the end of the analysis period.
