Structure Prices Adjust: Secondary Market Sees Gains as Primary Sector Faces Supply Issues

Key Insights

• Secondary Market Trends: Prices increase in Raipur, Hyderabad, and Chennai by Rs 200-300, while Durgapur remains unchanged.
• Price Adjustments in Primary Market: SAIL reduces prices by Rs 500/mt, while JSPL rolled over and RINL reduced by Rs 700/mt.
• Supply Challenges in Primary Sector: SAIL’s IISCO facility restart and RINL round bar production easing supply constraints, but JSPL sections remain hard to obtain.
• Secondary Supply Stability: Secondary mills are well-stocked and no longer facing shortages, with Mandigobindgarh’s rolling mills resuming operations after a brief strike.
• Tata Steel’s Expansion Plans: Tata Steel is securing iron ore supplies from NMDC and OMC and operationalising new mines to meet increased production targets.

Structure Price

• Secondary Market: Secondary markets Raipur up by Rs 200, Mandi up by Rs 200, Durgapur stable, Hyderabad up by Rs 300 and Chennai up by Rs 300.

• Primary market: In this month’s price revision, SAIL reduced price by Rs 500/mt, JSPL rolled over the rates & RINL reduced price by Rs 700/mt.

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

• Ex-Raipur: Rs 46,000/mt

• Ex-Hyderabad: Rs. 47,000/mt

• Ex-Raigarh: Rs 46,000/mt

• Ex-Chennai: Rs. 47,100/mt

• Ex-Mandi Gobindgarh: Rs. 47,200/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 facility is already running and producing after maintenance last month. Heavy structural supplies, which are currently hard to find in India, should be easier to find as a result. Additionally, the production of RINL round bars, which are currently out of stock, has begun. JSPL sections take four to six weeks to manufacture and are challenging to market. Therefore, supply is a major issue in the primary sector that needs to be fixed before the end of this month.
• Secondary: With their mills, secondary mills have enough of resources, so they don't have to worry about shortages for finished items. However, Mandigobindgarh's rolling mills, which were on strike last week over the government closing a coal plant because of pollution, are now operating.

Structure News

• Tata Steel has initiated discussions with state-run miners NMDC and Odisha Mining Corporation (OMC) to secure iron ore supplies as it expands its steel production capacity to 40 MTPA by 2030. The company is also operationalizing two new mines, Kalamang West and Gandalpada, to ensure raw material security. Currently, Tata Steel meets its demand from six mines in Odisha and Jharkhand. However, with leases of four mines expiring in 2030, Tata Steel is preparing a roadmap to secure over 60 MT of iron ore required for its increased production.

Expert Opinion

• Since the rolling mills in Mandigobindgarh have resumed operations following last week's strike, the secondary market seems to be rising this week due to an apparent increase in demand for raw materials.