10 September 2024: Steel Price Today

The price of steel in India can vary depending on the specific type of steel, grade, and location. However, as of September 10, 2024, the average price for steel in India is around Rs. 41,830 per tonne. It’s important to note that this price can fluctuate based on market conditions, supply and demand, and other factors.

Steel Industry in India

The use of metals has been one of the main drivers of industrialisation. Historically, steel has been one of the most valuable metals. It is both a raw material and an intermediate product, so its production and consumption are commonly used as indicators of a nation’s economic development. Three groups comprise the Indian steel industry: main producers, secondary producers, and major producers. India is the second-largest producer of crude steel in the world, producing 121.29 MT of finished steel and 125.32 MT of crude steel in the financial year 2023.

In the financial year 2024, 123–127 MT of steel is expected to be produced in India, an increase of 4-7%. The availability of inexpensive labour and raw materials like iron ore domestically has been a major factor in the expansion of the Indian steel industry. Therefore, a significant portion of the country’s manufacturing output has come from the steel industry. Modern steel mills can be found in India’s steel industry. It has always aimed to upgrade to higher energy efficiency levels and continuously modernise older plants.

Over the last 10 to 12 years, the steel industry has developed substantially. Since 2008, domestic steel demand rose by nearly 80%, but production has grown only by 75%. By 2030–31, it is projected that the yearly production of steel will surpass 300 million tonnes.

Types of Steel

Carbon Steel

Carbon steel is primarily composed of iron and carbon. The carbon content determines the steel’s hardness, strength, and ductility. There are three subcategories of carbon steel based on carbon content:

a) Low Carbon Steel – Contains up to 0.25% carbon. It is soft, ductile, and weldable.

b) Medium Carbon Steel – Contains 0.25% to 0.6% carbon. It offers increased strength compared to low Carbon steel.

c) High Carbon Steel – Contains 0.6% to 1.5% carbon. It is hard, tough, and non-ductile.

Stainless Steel

Stainless steel contains a minimum of 10.5% chromium, along with iron and other elements. The presence of chromium provides excellent corrosion resistance. There are several types of stainless steel:

Austenitic Stainless Steel – This type is non-magnetic and has excellent corrosion resistance. It is commonly used in kitchen appliances, food processing equipment, and automotive applications.

Ferritic Stainless Steel – Ferritic stainless steel has good corrosion resistance and is magnetic. It is used in automotive parts, architectural applications, and kitchenware.

Martensitic Stainless Steel – Martensitic stainless steel is known for its high strength and hardness. It is used in cutlery, knives, and industrial equipment.

Duplex Stainless Steel – Duplex stainless steel has a mixed microstructure of austenite and ferrite. It offers a combination of strength and corrosion resistance and is used in chemical processing and oil and gas industries.

Precipitation Hardening Stainless Steel – This type of stainless steel can be strengthened by heat treatment. It is used in aerospace components, high-strength applications, and surgical instruments.

Alloy Steel

Alloy steel is carbon steel alloyed with other elements such as chromium, nickel, or vanadium. The addition of these elements enhances the steel’s properties, such as strength, hardness, and corrosion resistance. Alloy steel is widely used in construction, automotive, and machinery industries.

Tool Steels

Tool steels are specifically designed for making tools. They have high hardness, strength, and wear resistance. Tool steels are used in the production of cutting tools, dies, molds, and machinery parts.

Properties of Steel

The different properties of steel are described below

• Strength – Steel is known for its exceptional strength, making it suitable for a wide range of applications. The strength of steel can vary depending on its composition, including the carbon content and the presence of alloying elements.
• Durability – Steel is highly durable and has excellent resistance to wear, impact, and deformation. It can withstand heavy loads and extreme conditions, making it ideal for structural purposes.
• Ductility – Ductility refers to the ability of a material to deform without fracturing. Carbon steel, especially low and medium carbon steel, is ductile and can be easily shaped or formed into various structures.
• Hardness – The hardness of steel is determined by its composition and heat treatment. High carbon steel and certain alloy steels can have high hardness levels, providing excellent resistance to abrasion and wear.
• Corrosion Resistance – Stainless steel, with its high chromium content, exhibits excellent corrosion resistance. It forms a passive oxide layer on the surface that protects it from rusting, tarnishing, and other forms of corrosion. Carbon steel, on the other hand, is prone to rusting and requires additional protection.
• Weldability – Carbon steel, especially low and medium Carbon steel, is highly weldable. It can be easily joined through various welding processes without significant loss of strength or ductility. Stainless steel and alloy steels may require specific welding techniques and filler materials.
• Heat Resistance – Steel has good heat resistance, allowing it to retain its strength and structural integrity at high temperatures. Certain alloy steels, such as heat-resistant steels, are specifically designed to withstand elevated temperatures without deformation or loss of strength.
• Electrical and Thermal Conductivity – Steel exhibits relatively high electrical and thermal conductivity compared to other materials. This property makes it suitable for electrical wiring, heat exchangers, and various industrial applications.
• Machinability – The machinability of steel refers to its ease of being machined or shaped using machining processes such as cutting, drilling, and milling. Different types of steel have varying degrees of machinability based on their composition and hardness.
• Versatility – Steel is an incredibly versatile material, available in various forms, sizes, and grades. It can be fabricated into different shapes, including sheets, bars, tubes, and plates, to meet the specific requirements of different industries and applications.

  Factors affecting Steel prices

The price of steel is influenced by the following factors

• Supply and Demand – Similar to any commodity, scarcity drives up the price of steel. With the growing demand for steel due to its expanding applications, assessing current and projected supply and demand levels helps determine the appropriate cost per unit.
• Materials Cost – Steel comprises different components, primarily recycled scrap metal and iron ore. When these raw materials are scarce, it naturally increases the cost of the final product. Any spikes in the prices of these raw materials directly affect the cost of steel.
• Shipping and Labor Costs – Local production often results in lower costs, but this is not always the case. Transportation and shipping expenses in and out of specific regions, like South Africa, fluctuate depending on factors such as the time of year, currency strength (e.g., the Rand), and political situations. Sometimes, importing raw materials or steel itself can be more cost-effective than domestic production. However, there has been pressure on the manufacturing industry to prioritize local materials to boost jobs, which may lead to higher labour costs.
• Currency Fluctuations – The strength of the US Dollar and the local currency, such as the Rand, significantly impact steel prices. A weaker currency can affect even the most resilient industry.
• Energy Costs – Steel production requires significant amounts of energy, particularly in the form of electricity and fuel. Fluctuations in energy prices can impact the cost of steel production, which can subsequently affect steel prices.
• Government Policies and Regulations – Government policies and regulations related to trade, tariffs, taxes, environmental regulations, and subsidies can have a significant impact on the steel industry. Changes in these policies can affect the cost of raw materials, production processes, and overall market dynamics, thus influencing steel prices.
• Technological Advancements – Technological advancements in steel production processes can lead to increased efficiency and reduced production costs. Conversely, technological disruptions or the need for costly upgrades can affect steel prices.
• Global Economic Conditions – The state of the global economy can influence steel prices. During periods of economic growth and increased construction activity, demand for steel tends to rise, potentially leading to higher prices. Conversely, during economic downturns, demand for steel may decrease, which can put downward pressure on prices.
• Geopolitical Factors – Geopolitical events such as trade disputes, sanctions, political instability, and natural disasters can disrupt the global steel market. These events can affect the supply and demand dynamics of steel, leading to price fluctuations.
• Speculation and Financial Markets – Like many commodities, steel prices can be influenced by speculation and trading activities in financial markets. Traders and investors may speculate on future steel prices based on various factors and market trends, which can create price volatility.

Benefits and features

• Durability – Steel is highly valued for its exceptional durability, making it a preferred choice for buyers. Unlike wood, steel constructions are resistant to termites, corrosion, and combustion, ensuring long-term strength and structural integrity. Properly processed and coated steel does not rot, warp, crack, split, or catch fire, providing reliable performance and weather resistance.
• Cost Efficiency – Steel is renowned for its cost efficiency, making it a favourable option for buyers and partners. Its quick and economical use results in speedy and cost-effective construction. Moreover, steel’s long-term durability reduces the need for replacements and lowers insurance costs. Its inherent adaptability enables modifications or adjustments at minimal additional expense.
• Low Emissions – Steel actively contributes to a low-carbon future by reducing overall CO2 emissions. Its energy efficiency aligns with sustainability goals and plays a pivotal role in building a strong and environmentally conscious society. Embracing ‘green’ practices not only promotes positive PR for businesses but also offers potential tax deductions.
• Design Flexibility – In addition to its strength, steel offers remarkable flexibility in design. It can be machined, stamped, roll-formed, welded, or painted, allowing for endless possibilities in product creation. The extensive range of steel products available across industries such as automotive and construction demonstrates its universal adaptability as a building material.
• Recyclability – One significant advantage of steel is its 100% recyclability. Many steel mills are dedicated to using recycled materials, ensuring the continuous reuse of steel without compromising its properties. With approximately 88% of today’s steel made from recycled products, steel contributes to energy efficiency and conservation. Recycling steel saves a substantial amount of energy, equivalent to powering millions of households annually.

How are Steel rates decided?

The CRU Index, developed by the Commodities Research Unit (CRU), is a benchmark used to determine steel prices, specifically for U.S. Midwest Domestic Hot-Rolled Coil Steel (HRC). The CRU Index is widely recognized and serves as a settlement price for futures and options contracts in the steel industry. It is calculated based on actual transactions and provides a reliable measure for tracking steel performance. Understanding the difference between steel market prices and steel product prices is important, as market prices reflect overall steel costs, while product prices consider specific factors like production and distribution. The CRU Index plays a crucial role in fair contract negotiations and risk management in the steel industry.

It’s important to distinguish between steel market prices and steel product prices. Steel market prices reflect the overall cost of steel in the global market, influenced by factors such as supply and demand, production costs, and economic conditions. On the other hand, steel product prices pertain to specific steel products, considering factors like production, transportation, and distribution costs. While market prices influence product prices, they may vary between regions and suppliers based on orders’ volume and type.

What are Steel Sector Stocks

The stocks and shares of companies that have a substantial stake in the steel industry are referred to as steel sector stocks. These businesses are involved in many different aspects of the production, distribution, and processing of steel. Shares of integrated steel manufacturers, businesses engaged in the steel supply chain, and specialised steel manufacturers may be included in the stocks of the steel industry. You can help the steel industry grow and perform better by purchasing stocks in the sector.

A multitude of factors impact the performance and earnings of the stocks, such as global economic conditions, advances in technology, trade and tariff regulations of the government, etc. To reduce risks

when investing in the metal sector share, investors are advised to take a long-term approach to investing and diversify their portfolios.

Investors should also perform in-depth research and analysis to assess the market share, production capacity, and overall economic health. This will ensure that they don’t select the wrong metal sector stocks and suffer significant losses.

Steel as an investment

Investing in steel can offer several potential benefits and opportunities. Here are some reasons why one might consider investing in the steel industry

• Essential Industry – Steel is a fundamental commodity that is widely used in various sectors such as construction, infrastructure, engineering, and automotive. The demand for steel remains constant as it is a key material in building structures, manufacturing equipment, and developing transportation networks.
• Economic Growth – Steel consumption is closely linked to economic growth. As countries develop and urbanize, the demand for steel increases. Investing in the steel industry can be a way to participate in the growth of emerging markets and developing economies.
• Global Demand – Steel is a globally traded commodity, and its demand is not limited to a specific region or country. This global demand provides opportunities for investors to diversify their portfolios and benefit from the overall growth in the steel industry.
• Long-Term Stability – The steel industry has a long history and has demonstrated resilience over time. Despite short-term fluctuations, the long-term outlook for steel demand remains positive due to ongoing infrastructure development and urbanization trends worldwide.
• Infrastructure Investments – Governments around the world continue to invest in infrastructure development, which drives the demand for steel. These investments can create significant opportunities for steel producers and investors in the sector.
• Technological Advancements – The steel industry is constantly evolving and adopting new technologies to improve production processes, enhance product quality, and reduce environmental impact. Investing in innovative steel companies can provide exposure to advancements in the industry and potentially generate long-term returns.
• Dividend Income – Some steel companies offer attractive dividend yields, making them appealing to income-focused investors. By investing in dividend-paying steel stocks, investors can potentially generate regular income alongside potential capital appreciation.

FAQs on Steel Price Today

1. What factors influence the price of steel?The price of steel is influenced by factors such as supply and demand, material cost, shipping and labour costs, currency fluctuations, energy costs, government policies and regulations, technological advancements, global economic conditions, geopolitical factors, and speculation in financial markets.
2. What role do government policies and regulations play in influencing steel prices?Government policies and regulations related to trade, tariffs, taxes, environmental regulations, and subsidies can have a significant impact on the steel industry. Changes in these policies can affect the cost of raw materials, production processes, and overall market dynamics, thus influencing steel prices.
3. What are some potential benefits of investing in the steel industry?Investing in the steel industry can offer benefits such as participating in an essential commodity sector, capitalizing on economic growth, diversifying portfolios due to global demand for steel, long-term stability, opportunities arising from infrastructure investments, exposure to technological advancements, and potential dividend income from steel companies.
4. Which components primarily constitute steel, and how can scarcity of these raw materials affect steel prices?Steel primarily comprises recycled scrap metal and iron ore. The scarcity of these raw materials can naturally increase the cost of the final steel product.
5. How do currency fluctuations, such as the strength of the US Dollar, affect steel prices?Currency fluctuations, particularly a weaker local currency compared to the US Dollar, can significantly impact steel prices. This can affect even the most resilient steel industry.
6. How does the energy-intensive nature of steel production affect steel prices?The energy-intensive process of steel production, particularly electricity and fuel consumption, can make steel prices sensitive to fluctuations in energy costs. Changes in energy prices can impact the overall cost of steel production, consequently influencing steel prices in the market.
7. How do environmental regulations influence steel prices?Stringent environmental regulations may require steel producers to invest in cleaner technologies and processes, leading to additional production costs. This can impact the overall supply chain and affect steel prices in the market.
8. How does steel’s durability contribute to its value as a building material?Steel’s exceptional durability, resistance to termites, corrosion, and combustion make it a preferred choice for construction. Its longevity ensures long-term structural integrity and reduces maintenance costs, enhancing its overall value as a building material.
9. How does steel’s recyclability align with sustainability goals?Steel’s 100% recyclability makes it an environmentally friendly choice. Being widely recycled reduces the need for new raw materials, conserving energy and reducing CO2 emissions, which aligns with sustainability goals.
10. How does the stability of the steel industry make it an attractive long-term investment option?Despite short-term fluctuations, the steel industry’s long history of resilience and ongoing demand for steel in various sectors make it an attractive long-term investment option. The need for steel in infrastructure and industrial development ensures a steady market for investors.