Steel Structures Market Update: Primary Prices Up, Secondary Demand Drops

Key Insights

• Price Changes: Primary prices increased by Rs 750/mt (SAIL) and Rs 1000/mt (RINL) in November, while secondary market prices remain relatively stable, with slight decreases.
• Supply Chain Issues: Supply in the primary segment is impacted by delays at the SAIL IISCO plant, and shortages of RINL round bars and JSPL sections.
• Market Conditions: Despite a stable supply in secondary markets, demand is weak due to factors like low trade activity and the NGT's ban on construction.
• Government Intervention: The Indian Steel Ministry has taken action to prevent the entry of low-quality steel into the market, aiming to protect domestic producers.
• Upcoming Production Relief: The SAIL IISCO plant is scheduled to resume production in mid-December, which is expected to alleviate some of the supply issues.

Structure Prices

• Secondary Market: Mandi down by Rs 100, Durgapur down by Rs 200, Hyderabad, Raipur and Chennai stable.

• Primary market: As per new monthly price revision, SAIL increased prices by Rs 750/mt, RINL increased prices Rs 1000/mt and JSPL rates are rollover in this month.

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

• Ex-Raipur: Rs 46,300/mt

• Ex-Hyderabad: Rs. 47,300/mt

• Ex-Raigarh: Rs 46,300/mt

• Ex-Chennai: Rs. 48,300/mt

• Ex-Mandi Gobindgarh: Rs. 47,400/mt

• Ex-Durgapur: Rs. 44,100/mt

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

• Ex-Durgapur: Rs. 55,250/mt

• Ex-Chennai: Rs. 58,750/mt

• Ex-Hyderabad: Rs. 57,250/mt

• Ex-Ahmedabad: Rs. 57,750/mt

• Ex-Ghaziabad: Rs. 55,750/mt

Structure Supply and Demand

• Primary: The SAIL IISCO Plant, where heavy structures like NPB and WPB are made, has been undergoing maintenance. These commodities are in high demand throughout India and are offered at premium prices, depending on availability. This has now had a significant effect on source material availability. Delivery is expected to occur in the middle of next month. The only manufacturer of RINL round bar is now out of stock and delivery is expected to commence next month. There is also a scarcity of JSPL sections, which take four to six weeks to deliver the material. Thus, supply is a major issue in the primary segment.
• Secondary: Since secondary mills have an adequate supply of both raw materials and completed goods, they are not concerned about material shortages. They lack the basic materials to make fresh stock, even while scrap is scarce. Amid the NGT's ban on building due to pollution and low trade demand, secondary market demand is incredibly low across India. The mills are currently suffering from a drop in demand.

Structure News

• India's Steel Ministry has detected imports of poor-quality steel and has blocked these consignments, as they depress domestic prices and harm steel producers. Some traders have attempted to bypass BIS standards by altering steel grades. The Bureau of Indian Standards (BIS) has set 151 standards for 1,376 steel grades, ensuring that steel conforms to quality norms. Meanwhile, Japan's embassy in India raised concerns about Japanese steel shipments being delayed at Indian ports due to missing No Objection Certificates (NOCs), and has approached the Ministry of Steel and Ministry of Commerce for resolution.

Expert Opinion

• The main supply problem seems to be resolved because the SAIL IISCO factory is scheduled to start production in mid-December. It is expected that prices will level down the following month. Although secondary prices appear to be declining.