Primary TMT Prices Stable Ahead of Union Budget; February May Bring a Spike

Key Takeaways

• Primary TMT Prices: Prices are stable across Mumbai, Delhi NCR, and Vizag, ranging from Rs. 50,000 to Rs. 52,000 per mt.
• Demand Outlook: Steady demand is expected to rise in February due to government infrastructure projects and potential price adjustments.
• Budget Impact: The upcoming budget announcement is anticipated to prioritize infrastructure, potentially driving higher TMT demand and prices.
• Industry Challenges: India’s steel industry faces capacity gaps, needing annual growth of 7–8% to achieve 2030–31 targets.
• Government Support: Policy changes, including increased import duties on Chinese steel, aim to boost domestic production and reduce dependency.

Primary TMT Prices

• Prices are as follows (size 12 to 32mm):
• Ex-Mumbai: Rs. 51,500-52,000/mt
• Ex-Delhi NCR: Rs.51,500-52,000/mt
• Ex-Vizag: Rs. 50,000 - 50,500/mt
• Note - Distributors across North, West and South are stable. Above pricing is based on the same.

Primary TMT Demand & Supply

As the final week of January approaches, the market's demand appears to be steady, but prices could spike in February. Primary manufacturers experienced inventory problems, but once the material is in transit, demand and supply will stabilize in a few days. In a few days, supply and demand will be balanced.

Primary TMT News

• The Ministry of Steel revealed India is at 59.84% of the crude steel capacity target for 2030-31, with a shortfall of 120.49 million mt. To meet the 300 million tonne goal, a CAGR of 7.61% and an annual addition of 17.21 million mt are required.
• Crude steel demand/production stands at 56.49% of the target, with a gap of 110.96 million tonnes, needing 8.5% annual growth. Finished steel demand/production reached 60.36%, but a gap of 91.18 million tonnes requires 7.48% annual growth. Per capita finished steel consumption is at 61.83% of the target, with an annual growth rate of 7.11% needed. Gujarat leads with 68 of the 305 steel units set up in the last five years.
• The government needs to create a conducive policy environment to help the steel industry regain momentum. As the world’s second-largest steel producer, India’s steel sector drives economic growth but faces challenges like sluggish demand, capacity gaps, and ambitious targets for 2030-31. Steel production boosts GDP by 1.4X and generates 6.8X jobs in related sectors. Being deregulated, the sector relies on policy support for growth.

Expert Opinion

According to market trends, the market might exhibit favourable trends since the government is expected to place more emphasis on infrastructure projects when it announces the budget in February. This may drive up steel prices. By raising import taxes, the government is also attempting to reduce the supply of Chinese steel, which might raise demand for domestic steel in the nation.