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Commodity, Raw Material Prices May See Steady Rise Amid Russia-Ukraine Crisis: Steel Association

On the other hand, both Russia and Ukraine are net exporters of steel, cumulatively to the tune of almost 40 million tonnes, which will affect international steel availability

The prices of commodity and raw materials might increase amid Russia-Ukraine crisis.
The prices of commodity and raw materials might increase amid Russia-Ukraine crisis.

 Amid the Russia-Ukraine crisis, the commodity and raw material prices, including coking coal, will see a steady increase and this will, in turn, impact the input cost of steel production, the Indian Steel Association on Friday said.

On the other hand, both Russia and Ukraine are net exporters of steel, cumulatively to the tune of almost 40 million tonnes, which will affect international steel availability, the ISA said.

Metallurgical coal or coking coal is a vital ingredient in the steel-making process.

"The current situation is already getting reflected in higher oil and gas prices, leading to an increased cost of energy. Moreover, commodity and raw material prices will also see a steady increase. For example, coking coal prices have further started increasing, which was already at an elevated level. This, in turn, will impact the input cost of production," Indian Steel Association Secretary-General Alok Sahay told PTI.

Indian Stainless Steel Development Association (ISSDA) President K K Pahuja said that currently, there is the export of stainless steel worth 200 million dollars from India to Russia so material naturally will have problems in export during the current crisis.

"And, more than that, whatever material was already in transit or under export the payment may get stuck up... I think at any given time, $70-80 million will be stuck in payment. So, there is uncertainty on how that money will be realized. That is one area," he said.

Secondly, expect China other countries might also export to Russia and that material will also get blocked. So, material from Europe or other parts of Asia, which will become surplus, will also try to find markets in countries like India and that material may get diverted to India, he added.

"That is apprehension...if the exports from the other parts of the world get affected then that material may try to find alternative markets like India and we might have a glut here," he said.

On Thursday, Russia launched military operations against Ukraine. Meanwhile, The European Union leaders are putting on a united front and agreed on the second package of economic and financial sanctions on Russia. 

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