Steel prices, which have been on a song for the past two years, are finally set to correct on weak seasonality, and may trade at around Rs 60,000 per tonne by the end of the current fiscal year, down from the peak of Rs 76,000 per tonne it scaled last month, says a report.

Prices are still holding high because of the continuing uncertainty over supply disruptions, decarbonisation measures globally, especially in China and geopolitical risks stemming from the Russia-Ukraine war, which has driven up raw material costs, Crisil said in a report on Monday.

Price corrections are due at the onset of monsoon next month which will pull down demand as construction will be on hold along with the likely lower premium realisation that domestic mills may get from exports, the report said.

According to Koustav Mazumdar, an associate director with the agency, the onset of the weak demand season because of the monsoon and less-lucrative exports mean domestic steel prices should begin easing and ultimately move towards Rs 60,000 per tonne by March 2023, down from Rs 76,000 it scaled in just the last month, which will still be well above the pre-pandemic levels.

Flat steel prices could rise 3-5 per cent this fiscal year after surging over 50 per cent in 2021-22.

Hetal Gandhi, a director at the agency, reasoned that despite a moderation in demand in January-March, steel prices inched up owing to higher input costs and buoyant exports.

Domestic supply also stayed tight, eliminating the differential between global landed and domestic prices, which was once nearly Rs 15,000 per tonne.