Primary Structure Prices Stable as SAIL and RINL Struggle with Supply Issues

Key Takeaways

• Price Increases: SAIL raised prices this month by Rs 2000/mt, VSP by Rs 1000-1500/mt, and JSPL adjusted prices by Rs 1000-2500/mt based on section sizes.
• Primary Supply Challenges: RINL’s reopening helps with shortages, but large structural sections are still limited due to high demand.
• Secondary Market Stability: Secondary mills have adequate stock for standard sizes, and prices are falling due to slow demand and ample inventory.
• High Inventory Levels: Steel companies are managing an inventory of Rs 89,000 crore amid rising imports, with monsoon-related construction delays impacting demand.
• Future Outlook: Price hikes are attributed to limited supply, with SAIL and RINL struggling to keep up. Secondary market activity is slow, increasing price pressure.

Structure Current Prices

• Secondary Market: Secondary market stable in all regions.

• Primary market monthly price revision: SAIL increased prices by Rs 2000/mt, VSP increased by Rs 1000-1500/mt, and JSPL increased UB/UC sections by Rs 1000-1500/mt and lower sections by Rs 2500/mt.

• The offers for 100 x 50 Channel in the Secondary Steel market are as follows:

• Ex-Raipur: Rs 46,600/ton

• Ex-Hyderabad: Rs. 48,500/ton

• Ex-Raigarh: Rs 46,600/ton

• Ex-Chennai: Rs. 49,400/ton

• Ex-Mandi Gobindgarh: Rs. 48,400/ton

• Ex-Durgapur: Rs. 45,900/ton

• The offers for 100 x 50 Channel in the Primary Structural Steel market are as follows:

• Ex-Durgapur: Rs. 54,500/ton

• Ex-Chennai: Rs. 58,000/ton

• Ex-Hyderabad: Rs. 56,500/ton

• Ex-Ahmedabad: Rs. 57,000/ton

• Ex-Ghaziabad: Rs. 54,500/ton

Structure Supply and Demand Insights

• Primary: Sections of the RINL make have already been put on the market to help with the supply crisis, and the facility is already back in operation, but not in full pace. Additionally, it is the only producer of round bars that are slated to launch next month but are presently unavailable. Even when they are absolutely required, big structural sections are uncommon in many locations. The current shortage of materials is having a major effect on the supply. Due to SAIL's inability to provide the massive demand for structural steel, the RINL facility's restart will help. Consequently, supply is a major issue in the primary segment.
• Secondary: Secondary mills have ample inventory for standard sizes, so they are not concerned about shortages of the finished product. However, smaller mills are experiencing a lack of overstocks and a shortage of raw materials due to the difficulties in locating billet. Due to the current sluggish demand in the commerce business and the slowdown in demand during the Diwali season, prices are declining.

Structure News Highlights

• As per reports, Indian steel companies are struggling to clear an inventory of Rs 89,000 crore as imports continue to flood the market, despite higher local consumption. Inventory levels have remained steady at around 14 million mt by September, a 13% increase from last year. Heavy monsoon rains have dampened demand from the construction industry, prompting the steel ministry to monitor the situation closely.

Expert Opinion

• This month, all the main manufacturers have raised their pricing due to outside factors. Due to a lack of plant materials, SAIL prices have gone up dramatically. RINL Round bars are extremely sought after and difficult to locate. The inaccessibility of some crucial structural components has further increased the cost of the JSPL segment this month.
• By reducing demand in trader market, slow secondary market activity drives down secondary market prices.