Structural Steel Market Update: Prices Rise Amid Supply Constraints

Industry Updates

• Secondary Market Sees Moderate Price Hike: Prices in the secondary market rose by ₹200–₹300/MT due to tightening supply and steady demand recovery, with increased orders from fabricators and EPC contractors in key regions.
• Rising Scrap and Freight Costs Pressure Mills: Higher scrap prices are squeezing margins for secondary producers while rising freight costs are causing delivery delays and leading to zone-based pricing differences in distant markets.
• Infrastructure Demand Supports Primary Market Prices: Strong infrastructure demand and rising input costs are keeping primary market prices stable to firms, with Chennai and Durgapur seeing slight upward movement in structural steel pricing.
• Government Tenders May Drive Further Price Gains: Upcoming government tenders for structural steel procurement could strengthen prices, particularly in channels and beams, benefiting both primary and secondary market segments.

Structure Price Update

• Since last Saturday, the secondary market has witnessed a ₹200–₹300/MT increase, driven by tightening supply and a steady demand recovery.

• Primary Market (Base Prices for 100x50 Channel):

• Durgapur: ₹51,500

• Chennai: ₹56,500

• Vizag: ₹55,000

• Mumbai: ₹55,500

• Ghaziabad: ₹54,000

• Secondary Market Prices (Base Prices for 100x50 Channel):

• Raipur: ₹46,200

• Hyderabad: ₹48,500

• Raigarh: ₹45,800

• Chennai: ₹48,700

• Mandi Gobindgarh: ₹48,200

• Durgapur: ₹45,600

Structure Demand and Supply

• Primary Market: The structural steel primary market continues to show strong resilience, with stable-to-firm pricing across major hubs. A slight upward movement in prices is visible in Chennai and Durgapur, backed by robust infrastructure demand and a marginal increase in input costs.
• Mill capacity utilization remains high, but dispatch congestion and transportation challenges are causing delivery delays in certain regions. Traders and institutional buyers are opting for forward booking strategies to secure price advantages and ensure timely deliveries, particularly for heavy-section materials.
• Secondary Market: Secondary market activity has gained moderate momentum this week. Improved order inflows from fabricators and EPC contractors in Raipur and Hyderabad are supporting restocking among local traders.
• While a mild price hike is evident in most regions, buyer sentiment remains conservative due to unpredictable delivery schedules and cost adjustments. Chennai and Mandi Gobindgarh have seen a marginal improvement in offtake, though Tier-2 demand remains subdued in some areas.

Structure News

• Rise in Scrap Prices Pressures Secondary Producers: An upward trend in scrap prices is increasing cost pressure on secondary manufacturers, affecting their pricing competitiveness. As a result, some regions are experiencing compressed margins despite rising demand.
• High Freight Costs Impacting Mill Dispatches: Rising freight and logistical costs are emerging as a new bottleneck in dispatch cycles. Mills are recalibrating their pricing for distant markets, leading to more prominent zone-based pricing differences for local buyers.
• Increased Government Tender Activity Anticipated: A significant number of government tenders for structural steel procurement are expected to be floated by the end of the month. This could further firm up prices across both primary and secondary segments, particularly for channels and beams.

Expert Opinion

• Secondary Market: A gradual recovery in trade volumes is expected post mid-March. Buyers should monitor price fluctuations in scrap rates and freight charges and take selective positions in fast-moving items.
• Primary Market: With continued demand buoyancy and tight supply, prices may remain elevated in the near term. Procurement planning should factor in delivery delays and rising logistics costs. Heavy sections could see further price appreciation if mill output remains constrained.
• Recommendation: Primary buyers should firm up bookings early in the cycle to lock in current prices and mitigate future hikes.
• Secondary market participants may focus on short-term stock rotation strategies, prioritizing materials with high mobility and lower logistical dependencies.