The volatility in steel prices is likely to continue in the medium term due to the impact of the geopolitical situation on supply chain logistics, according to SteelMint.

Last week, steel makers increased the prices of hot-rolled coil (HRC) by ₹1,400 to ₹60,700 per tonne from ₹59,300 a tonne on February 22, the research firm said in a report.

In the last six months, steel prices have not been stable. The user industry has been witnessing price revisions on a weekly basis.

Also read: Indian steel mills hike price by ₹2,000 a tonne

"The volatility in the prices is likely to continue in the medium term on account of geopolitical situations across the globe impacting the supply chain," SteelMint said.

This situation has led to changing supply-demand scenarios impacting prices of raw materials and logistics, it said.

Iron ore fines with iron (Fe) content of 62 per cent were moved up to ₹5,480 tonne in February, from ₹4,400 tonne in December 2022.

Also read: Steel Min pushes for commissioning of NMDC Integrated Steel Plant by March 31

Similarly, imported hard-coking coal (HCC) prices increased steeply during this period.

The average price of HCC stood around $263 tonne in the first week of December. The prices increased to $396 tonne by February 18.

Iron ore and coking coal are the two key raw materials required for steel manufacturing.

Also read: India’s steel demand expected to grow close to GDP rates: Tata Steel MD

While iron ore is sourced is available from domestic mines, for coking coal, steel producers remain dependent on imports.

Any movement in the prices of raw materials has a direct impact on steel prices, which affects the user industries like real estate and housing, infrastructure and construction, automobile, and consumer goods.

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