Distributors Hold Inventory as Primary TMT Market Expects Price Hikes

Key Takeaways

• Price Fluctuations: Primary TMT prices have risen across various regions, but demand has yet to meet expectations.
• Inventory Hold: Distributors are holding stock, expecting further price hikes, but buyers are hesitant to place orders, leading to low order conversions.
• Margin Pressure: Increasing steel imports, particularly lower-priced imports from China, are intensifying pressure on the margins of Indian steel producers.

Primary TMT Prices

• Prices are as follows (size 12 to 32mm): Ex-Mumbai: Rs. 54,500-55,000/ton Ex-Delhi NCR: Rs. 54,500-55,000/ton Ex-Vizag: Rs. 52,500-53,000/ton
• Note - Distributors across north, west and south have increased prices. Above pricing is based on the same.

Primary TMT Demand & Supply

• It was anticipated that the market's demand would exhibit an upward trend, but this hasn't happened. The SAIL distributors anticipate an additional Rs 500 per ton hike. Distributors are holding inventory in anticipation of higher revenues in an expanding market. In two to three days, the price will become evident.

Primary TMT News

• A recent report by India Ratings and Research (Ind-Ra) reveals that rising steel imports into India, especially from China, Vietnam, Japan, and Korea, are putting significant pressure on the gross margins of domestic steel producers. This trend is expected to worsen in the second half of FY25.

Expert Opinion

• Given how frequently prices fluctuate, the market appears to be unstable. The last two to three weeks have seen an upward trend in the pricing. Buyers anticipating price reductions in the future, they are refusing to accept price increases and aren't placing orders.
• The number of inquiries has increased, but order are not converting, because the price acceptability has not come in market. The distributors expect additional pricing increase.