Steel prices in the domestic market have fallen by almost a tenth in the two weeks since the Centre levied export duty on the alloy, a trend underscored by the seasonal slowdown in demand.

Prices of domestic benchmark hot-rolled coil (HRC) steel at the traders’ end have slipped by about 8% or ₹5,500 to about ₹63,800 per tonne since May 18, according to SteelMint, a market intelligence agency. Top steelmakers have also quoted prices for June that are lower by ₹4,500-5,500 a tonne, said people with knowledge of the matter.

The government levied a 15% export duty on steel, effective May 22, to rein in prices in its bid to arrest inflation. It also levied a steep duty on the export of iron ore while cutting the import duty on key raw materials such as coal to reduce the cost of steel production. While these measures have helped tame prices in the domestic market, the decline began before the changes.

“Globally too, prices have been correcting,” said Ranjan Dhar, chief marketing officer, ArcelorMittal Nippon Steel India.

Prices Hit Peak in April

“Prices have come down in the US, UK, and China, thus there is a correction in India too,” Dhar said. “We totally understand and appreciate the government’s concern on inflation and hope with these corrections, which have already happened, these concerns are more than addressed.”

A drop in coking coal prices worldwide and the US Federal Reserve’s stimulus withdrawal are among the reasons for prices falling, he said. Steelmakers have also taken measures such as fixed-price contracts for infrastructure projects and price support for MSMEs, cushioning the impact of high steel prices on customers, Dhar said. HRC steel hit a peak of Rs 78,800 per tonne in the first week of April and has since been dropping at a rate of Rs 2,000-3,000 per week, according to Kalpesh Padhiar, senior associate for research at SteelMint. The rate of reduction in steel prices has picked up since the export duty levy, he said.