Secondary Structure Market Stable Despite Decline in Mandi; RINL Facility Reopens

Key Takeaways

• Primary Market Price Increase: SAIL, VSP, and JSPL have raised prices by Rs 1,000-Rs 2,500 per ton in response to material shortages and rising demand.
• Secondary Market Stability: Prices in the secondary market remain stable except for a Rs 300/ton drop in Mandi. Secondary mills are managing inventory but face billet shortages.
• Supply Shortage: A major shortage of structural steel, particularly round bars, is impacting the primary market, but the reopening of RINL’s facility provides some relief.
• Government Action on VSP: The Central government has infused Rs 1,650 crore into the Visakhapatnam Steel Plant, halting plans for privatization and focusing on reviving production.

Structure Prices

• Secondary Market: Secondary market stable in all regions except Mandi which is down by Rs 300.

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

• Ex-Raipur: Rs 47,100/ton

• Ex-Hyderabad: Rs. 49,000/ton

• Ex-Raigarh: Rs 47,100/ton

• Ex-Chennai: Rs. 49,900/ton

• Ex-Mandi Gobindgarh: Rs. 48,600/ton

• Ex-Durgapur: Rs. 46,100/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 Update

• Primary: The primary reasons for India's severe RINL material scarcity are the planned shutdown of the facility and the ensuing halt in operations. The RINL facility is currently operating again, albeit slowly, and some portions have already been put on the market to help with the supply shortage. It is also the sole manufacturer of round bars that are currently unavailable. In many places, large structural sections are rare, even when they are absolutely necessary. The supply is being significantly impacted by the present material scarcity. The reopening of the RINL facility will help because SAIL is unable to meet the enormous demand for structural steel. As a result, a significant problem in the primary segment is supply.
• Secondary: Secondary mills have adequate inventory for standard sizes, so they are not concerned about shortages of finished products. However, small mills are experiencing a lack of overstocks and a shortage of raw materials due to the difficulties in locating billet. The current sluggish demand in the trade business is causing prices to decline.

Structure Latest News

• The Central government has abandoned its plan to privatise Rashtriya Ispat Nigam Limited (RINL), the entity managing Visakhapatnam Steel Plant. Instead, it is focusing on reviving the 7.5 million-ton facility. In the last two months, Rs 1,650 crore has been infused, with Rs 500 crore in equity and the rest as working capital.

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Expert Opinion

• This month, all the main manufacturers have raised their pricing due to outside factors. Due to a lack of plant supplies, SAIL prices have gone up substantially. RINL Round bars are extremely sought after and difficult to locate. The price of the JSPL segment has also increased this month as a result of the inaccessibility of several crucial structural components. The RINL facility has reopened to help meet the structural need. By reducing demand, slow secondary market trading drives down secondary market prices.