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Monsoon May Dim Steel Margin Gains: Elara Capital Flags Seasonal Dip
Elara Capital warns that the early monsoon in India could soften the recent uptrend in steel prices, potentially affecting margins for manufacturers. With rains expected ahead of schedule, construction demand is likely to slow—traditionally a seasonal impact—putting pressure on steel pricing.
Even as input costs rise, particularly for coking coal and thermal coal, Elara warns that flat steel prices may be challenged by increased imports. One factor fueling this: a renewed Bureau of Indian Standards (BIS) certification for Southeast Asian mills in June, allowing easier entry of imported flat steel.
The impact? Steelmakers might find it harder to pass higher costs onto buyers, squeezing margins. Elara notes such dips are seasonal; margins are expected to recover once monsoon and crop-related slowdowns subside around end‑Q2, with demand reviving later in the year.
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