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Steel stocks were under pressure as there is an expectation of a price cut in July. Two factors may be responsible for the price cut. First, Russia will impose an export tax from August and so there is a possibility of higher exports from Russian producers. Second, Chinese prices have seen a sharp correction and in line with that Indian prices are also likely to see a correction.
There has also been a correction in export prices for India and that could reflect a lower price for steel. Moreover, India is getting into a seasonally weak quarter due to monsoons. During these months, construction activity in the country slows and as a result, long steel prices come under pressure. Also, secondary steel makers sitting on inventory would put pressure on prices.
Steel demand in India weakened due to the localised lockdown after the second COVID-19 wave. In the month ended May 2021, the consumption of finished steel recorded a sequential fall for the fifth consecutive month.
There is also an anticipation of the third COVID-19 wave and if that happens then buying could get postponed leading to more supply than demand.