Steel prices might take at least two years to cool down as its demand is consistently increasing, a top industry executive said.

During the current financial year, the demand for steel in India is also expected to exceed the production numbers, Jindal Steel and Power Ltd (JSPL) managing director V. R. Sharma said.

While the demand in financial year 2021-22 will be in the range of 140-150 million tonnes (mt), the country’s production is expected to be somewhere around 125mt, he said.

When asked about an estimated time for the steel prices to cool down, he said, “It (prices) will take around two years (to ease), because of the demand.”

While hot-rolled coil (HRC) in India is trading at around Rs 58,000 per tonne in April, international steel prices are hovering around $735-740 per tonne since April 1, 2021.

Both domestic as well as international prices are 50 per cent higher compared with a year-ago period.

He also said most of the countries, including India, have announced stimulus packages. Because of this, consumption has increased; and until the stimulus packages are exhausted, these prices will not come down.

On steel demand, Sharma said in calendar year 2020, the entire world has seen a slump except for China which recorded a growth of 6-7 per cent. The Indian steel industry recorded a negative growth of 10 per cent at 99mt.

“The all-India data is yet to come. But, in my view, from April 1, 2020 to March 31, 2021, we are at a level of minus 4 per cent...we have made around 104 MT of steel against expectations of 112 MT. However, these are the rough observations,” he said.

In the current fiscal, demand for steel will remain high. This year, domestic demand will be 140-150mt, while production is expected to be somewhere around 125mt.