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India Ratings said in a steel industry report on Monday that strong export demand and rising international prices will enable Indian steel producers to increase overseas shipments, although high transportation costs may cause concerns.

As the epidemic prevention measures have led to a sharp drop in steel demand in most industries, soaring steel prices in the local market may eventually face headwinds. On a month-on-month basis, the consumption of steel products in April this year fell by 23% to 6.78 million tons, and continued to decline in the second quarter.

In mid-May, India's domestic hot-rolled coil prices rose 3% month-on-month and 78% year-on-year. According to India Ratings, the main reasons for the increase in steel prices are large export orders, strong global demand and rising international prices of steel and iron ore.

However, it is worth noting that the drop in Chinese steel futures prices last week may have a certain impact on India's export orders and the country's domestic prices in the short term.

Taking into account the Chinese government's efforts to curb steel prices and the reduction in demand expectations, international steel prices may face resistance, but they will still be higher than their pre-epidemic levels.