Good news amidst rising inflation: Construction and auto industry will get relief due to fall in steel prices

High steel prices, which have been a problem for the automobile and construction industry for a long time, have started softening. This relief has come due to the fall in the prices of iron ore and coking coal, two major raw materials used in steel making in the international market. In the last one month, the price of steel has come down by about Rs 3,000 per tonne. In the coming months, the price may further drop by up to Rs 3,000 per tonne.

big drop in october
Iron ore was $228 a tonne in the international market in October, which has now come down to $103 a tonne. Iron ore prices in the country too have come down to Rs 11,500 per tonne from Rs 12,500 a month ago. Coking coal prices have also come down. Coking coal prices, which were sold at $390 a tonne in October, have declined 20% to $320 a tonne.

VR Sharma, MD, Jindal Steel and Power, said in a conversation with Dainik Bhaskar that there is a power crisis in China at this time. So there is less demand for iron ore. This has brought down the prices of iron ore and coking coal. The company has reduced steel prices by Rs 1500 per tonne. Spot steel prices in NCDEX have come down to Rs 44,000 per tonne, from Rs 49,300 a tonne a month ago.

Steel costs 39% in cars, 15% in realty
Steel is most commonly used in automobiles and construction. The average share of steel in a car is 39%. 25% steel is used in the construction of bridges and 15% steel is used in building construction. In such a situation, reduction in steel prices will give a big relief to both these sectors.

Hence the reduction in the price of iron ore and coal