Structure Market Update: Secondary Market Remains Stable; Supply Shortages Persist

Structure prices in the primary market have seen an increase due to supply shortages and operational issues, while the secondary market remains stable but with lower prices due to weak demand. Major steel manufacturers like SAIL, VSP, and JSPL have revised prices upwards.

Key Points

  • Price increases in the primary market: Driven by external factors, particularly shortages in key materials.
  • Secondary market struggles: Despite adequate stock for standard sizes, secondary mills face lower demand and raw material shortages.
  • Steelmakers' profits under pressure: Weak steel prices and demand likely to result in lower earnings for the September quarter.

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Structure Prices

  • Secondary Market: Secondary market stable in all regions.

  • 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.

  • Prices for secondary structures are as follows (Channel 100x50)

  • Ex-Raipur: Rs 48,000/ton

  • Ex-Hyderabad: Rs. 49,400/ton

  • Ex-Raigarh: Rs 48,000/ton

  • Ex-Chennai: Rs. 50,100/ton

  • Ex-Mandi Gobindgarh: Rs. 49,200/ton

  • Ex-Durgapur: Rs. 46,900/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 Trends

  • Primary: The scheduled shutdown of the facility and the subsequent suspension of operations are the main causes of India's acute RINL material shortage. Additionally, it is the only producer of round bars that aren't readily available right now. Even when they are absolutely required, big structural sections are uncommon in many locations. The current paucity of materials is having a major impact on supply. Despite the huge demand for structural steel, SAIL is unable to supply it. Therefore, supply is a major issue in the primary segment.
  • Secondary: Secondary mills have adequate stock for standard sizes, so they are not concerned about shortages of completed construction steel. However, small mills lack overstocks and are experiencing a shortage of raw materials as a result of the difficulties in locating billet. Due to the current poor trade market demand, prices are trending lower.

Structure News

  • Steelmakers are set to see a sharp drop in their profits in the September quarter as steel prices remain at an over 3-year low and weak demand during the quarter weigh on earnings, analysts said. While there has been some respite in input costs – of coking coal and iron ore – it will not be enough to offset the impact of the weak pricing, they said.

Expert Opinion

  • All primary manufacturers' prices have increased, and this shift is the result of outside influences. A lack of plant supplies has led to a spike in SAIL prices. RINL Round bars are extremely sought after and difficult to find. The price of JSPL section has also increased as a result of the unavailability of some heavy sections.
  • Price decreases in the secondary market are caused by the slow trading market, which lowers demand in the secondary market.