New Delhi, Futures prices of steel on National Commodity & Derivatives Exchange Limited (NCDEX) have softened significantly in the past one to one-and-a-half month period.

Prices came down from its recent peak of around Rs 61,000 per tonne to around Rs 46,500-47,000 in the first week of June. At the time of writing this report, the most-active June delivery steel contracts on the NCDEX were trading at exactly Rs 47,000.

What triggered this sharp decline in its prices in the Indian market?

The government recently waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry. Also, some experts say that the ongoing cool down of prices has something to do with the weak demand for the commodity during the monsoon season as some infrastructural activities typically slow down with the onset of summer season.

Further, India's mining major National Mineral Development Corporation (NMDC), which is under the Ministry of Steel, produced 3.2 million tonnes of iron ore in May 2022. This is 14.3 per cent higher than the 2.8 million tonnes that it produced in May 2021.

NMDC's cumulative production during April and May 2022 -- the first two months of FY23 -- stood at 6.35 million tonnes, a 7.4 per cent growth from the cumulative production of 5.91 million tonnes from the same period of previous year.

"Our consistent growth in production has not only made NMDC the fastest growing iron ore mining company in India but also the most consistent supplier to the domestic steel sector," said Sumit Deb, CMD of NMDC while releasing the production data on Thursday.

The reduction in the prices of the raw material will have an optimistic impact on the sector to keep the prices in check, Himanshu Jain, VP - Sales, Marketing and CRM, Satellite Developers had said recently.

According to Sachin Chopda, Managing Director of Pushpam Group, the reduction in import duties on iron ore and steel shall further pad the domestic availability of raw materials, which in return shall reduce the prices of steel products used in construction and control the rising prices of properties.