Steel Prices Will Remain Low In Next 3-4 Months, Says Go India Advisors’ Rakesh Arora

Steel prices aren’t expected to increase in the next three-to-four months until growth in the Chinese economy picks up, said Rakesh Arora.

“Global steel prices have started to correct despite iron ore prices going up,” Go India Advisors' managing partner told BloombergQuint in an interaction. China, the world’s second-largest economy, influences metal prices, he said, as it consumes over half of the major commodities.

The China economy continued to weaken in June amid an ongoing trade war with the U.S.—which has slapped tariffs on imports worth around $200 billion from the Asian country—and weakening outlook for small businesses. U.S. President Donald Trump and his Chinese counterpart Xi Jinping are in talks to avert tariffs on the rest of the nation’s exports to the U.S.

Yet, Arora expects prices of domestic iron ore—a key raw material used in making steel—to inch up as the commodity has turned more expensive globally.

“Indian iron ore prices have moved up by 10 percent while global iron ore prices have jumped 50-60 percent,” he said. “Therefore, there is scope for Indian iron ore prices to go up even as global prices have started to correct.”

Watch the full conversation here: