Today, almost every other industry utilizes steel-- be it for manufacturing construction materials like rebars, manufacturing certain medical products like surgical tools, producing home appliances like washing machines, or manufacturing cars, buses, or even trucks-- our dependency on steel can go beyond our expectations!
Just like any other metal or commodity in the market, even steel market prices keep on increasing and decreasing. A rise in steel prices can lead not only to increased manufacturing costs but also to a higher price of goods. Since India is the second largest steel industry in the world, given its major role in supplying steel across the world, fluctuating prices in the country are bound to leave a global impact. Let's understand how changing steel price trends in India can impact the market:
Export levels
Just as the fluctuating steel prices can affect the internal market, similarly, it can also affect the trade relations within the international market. As one of the largest steel producers in the world, if the steel prices fluctuate in the country, this means that it will definitely affect international trade. If Indian steel prices rise, then some of the importing countries may have to pay up as per the increased prices. While this may get us the profit but as it leaves an impact on their industries, it may also lead to a shift in the trade relationships in the future. Additionally, this may also lead to policies and agreements being adjusted accordingly.
Global competitive landscape
The rising and falling prices of Indian steel prices can bring a change to the competitive landscape for steel-producing countries. For example, if the steel prices increase in India, this scenario could give small-medium steel producers across the world an opportunity to expand their base by capitalizing through decreased costs.
Shift in investors' sentiment
Since India's steel industry plays a crucial role in the nation's economy-- the fluctuations in the prices can influence the investors in India and globally. This may also lead to a slow fun inflow in certain sectors and even loss of business.
Impact on manufacturing and construction sector
If the steel price in India keeps on increasing and decreasing, it can affect almost all industries dependent on steel. Industries like the automotive and home & industrial appliances sectors may lead to an increased end cost since the rise of steel prices may lead to costlier manufacturing processes.
Now we know that the rise and fall of steel prices can have a multifaceted impact not only on the Indian market but also on the global market. Again to emphasise, since India is the second largest steel producer and exporter— any pricing changes can greatly influence international steel trade and policies and affect various industries across the world. While these fluctuations are not in our hands but keeping an eye on the prices can better help us understand and plan for your business’ future.
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Date: Tue, 5 Sep 2023