Steel Prices Dip Pan-India Amid Demand Slump; BIS Order Sparks Input Concerns

Key Highlights

• Pan-India Price Drop: Distributors in major regions have slashed prices; Ex-Mumbai at ₹52,500–53,000/ton, Delhi NCR at ₹53,000–53,500/ton, and Vizag at ₹51,000–51,500/ton.
   
• Demand Remains Muted: Buyers are cautious, and producers are selectively cutting prices further to revive transactions.
   
• QCO Extension Shocks Industry: New BIS compliance requirement for imported steel inputs has raised fears of cost escalation and supply disruption.
   
• Stable Supply Chain: Inventory levels at distributor end remain healthy, avoiding immediate availability or logistical issues.

Current Regional Steel Prices and Market Sentiment

Primary TMT Prices:

• Ex-Mumbai: ₹52,500 – ₹53,000/ton
• Ex-Delhi NCR: ₹53,000 – ₹53,500/ton
• Ex-Vizag: ₹51,000 – ₹51,500/ton

Secondary TMT Prices:

• Ex-Delhi: ₹46,500 – ₹48,500/ton
• Ex-Wardha: ₹44,000 – ₹48,500/ton
• Ex-Raipur: ₹42,000 – ₹42,500/ton

TMT prices have declined across North, West, and South India as distributors adjust rates downward in response to subdued demand and sufficient stock availability.

Demand Trends and Seller Strategy

• Aligned with broader market trends, pricing continued its downward trajectory, indicating ongoing weakness within the sector.
• From a supply perspective, sellers are responding to muted demand by adopting increasingly competitive pricing strategies. 
• At the same time, distributors are maintaining sufficient inventory levels, thereby supporting consistent product availability and mitigating the risk of supply chain disruptions.

New BIS Compliance Order: Industry Reaction and Risks

• A new notification by the Ministry of Steel on quality certifications for steel inputs has given industry players less than one business day to comply with it and stands to create huge disruptions and cost escalations for Micro, Small, and Medium Enterprises (MSMEs) in the sector, according to steel industry participants and trade experts.
• The notification released on June 13, extended the Ministry of Steel’s Quality Control Order (QCO) on steel and steel products to the inputs that go into the making of these products too. 
• This means that the input and raw materials used to make steel and steel products, including imports, will also have to conform to the relevant standards issued by Bureau of Indian Standards. 
• For example, if a company in Malaysia supplies steel slabs to a Vietnamese company, which in turn processes them into sheets and exports those to India, both the Malaysian as well as Vietnamese firms will now need to be BIS-compliant. 

Expert Opinion: Short-Term Outlook and Market Stability

• Amid a noticeable decline in demand, producers have begun implementing more substantial price reductions on a selective basis. If this subdued demand persists, further price decreases may be anticipated in the coming week. The downturn is apparent across both primary and secondary markets, reflecting a broad-based contraction in purchasing activity and heightened caution among buyers.
• On the supply side, conditions remain stable. Distributors possess adequate inventory to satisfy current demand, with no immediate concerns regarding supply shortages or logistical disruptions. Concurrently, manufacturers are receiving fewer new orders, indicating that production levels are being closely managed in alignment with reduced demand, thereby minimizing the risk of excess inventory or operational disruptions