The novel coronavirus outbreak is likely to put pressure on domestic steel prices in the near term and increase downside risks for the sector due to a drastic supply-demand imbalance causing an inventory pileup, two reports released on Thursday said.The Covid-19 outbreak is likely to adversely impact Indian steel prices, which have been witnessing an upward trend since November, ratings agency ICRANSE -2.20 % said in a report, while India Ratings & Research (Ind-Ra) warned that the demandsupply imbalance created globally will get worse with the virus spreading across the world.“Domestic steel prices are currently trading at a discount of 7 per cent to landed cost from China,” said Jayanta Roy, senior vice-president at ICRA. “While this provides a headroom to domestic steelmakers to increase steel prices, the rising number of confirmed cases (of Covid-19) in India could add pressure to steel prices in coming months.”Consequently, ICRA has revised its estimate of domestic steel consumption growth to 4-5 per cent in 2020-21 against its November 2019 forecast of 6.5 per cent. The Ind-Ra report said Indian steel producers would face pricing pressures of about $30 per tonne, which could result in margin pressures of $25 per tonne.“The China steel market would continue to witness a demand-supply imbalance, which could result in price fluctuations continuing over March-May 2020 in the range of $30-40 per tonne,” it said. With the virus spreading to other steel-producing nations such as Japan, South Korea, the US and India, “it would keep steel prices depressed even in H2 of 2020” and could create a larger surplus globally of around 40 million tonnes with a bump-up in China steel exports in the second half of 2020-21, Ind-Ra said.