Steel Companies in India May See Improvements in Demand and Margins in Q3

According to a report prepared by Centrum, steel companies in India may see improvements in demand and margins in the third quarter of the current fiscal year. The report anticipates a recovery in demand in Q3 FY25 due to a decrease in monsoon rains and an increase in long steel prices while flat steel prices remain unchanged. Additionally, a drop of 25 USD/t in coking coal costs is expected in Q3 FY25, along with an improvement in margins compared to the previous quarter. The report indicates that steel companies are expected to achieve higher profitability in Q3 FY25 due to rising long steel prices, stable flat steel prices, and decreasing coking coal costs.

Furthermore, the report predicts that non-ferrous companies will experience an improvement in operational performance ranging from 3% to 20% compared to the previous quarter. For iron companies, however, it has been a challenging quarter, with domestic steel producers reporting an EBITDA loss of ₹700-1700 per ton. Average coking coal prices saw a decline of 25-30 USD/ton compared to the previous quarter, resulting in a significant drop in realizations per ton to ₹3,000-₹6,200.