Structure Steel Prices Strong in Primary Market, but Secondary Market Sees Decline

SAIL, VSP, and JSPL have raised structure prices in response to supply limitations, while secondary markets in locations like Mandigobindgarh and Durgapur have seen price reductions. RINL’s gradual return to operation supports primary supply, yet demand remains unmet due to limited availability of large structural sections.

Key Takeaways

  • Secondary Market: Locations like Mandigobindgarh and Durgapur saw price drops of Rs 200-300 due to sluggish demand, while Raipur, Hyderabad, and Chennai remained stable.
  • Supply Shortages: RINL has restarted operations but is not yet fully operational, which partially alleviates primary market shortages.
  • Strategic Partnership: JSW Group and Posco’s joint venture will build a 5 MTPA steel plant, focusing on sustainable production and exploring advancements in electric vehicles and renewable energy.
  • Price pressure: Price hikes in primary steel are driven by limited supply and RINL’s partial return, while the secondary market sees downward pressure due to low demand.

Structure Price

  • Secondary Market: Mandigobindgarh down by Rs 200, Durgapur down by Rs 300; Raipur, Hyderabad and Chennai stable.

  • 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.

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

  • Ex-Raipur: Rs 46,600/ton

  • Ex-Hyderabad: Rs. 48,500/ton

  • Ex-Raigarh: Rs 46,600/ton

  • Ex-Chennai: Rs. 49,400/ton

  • Ex-Mandi Gobindgarh: Rs. 48,200/ton

  • Ex-Durgapur: Rs. 45,600/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

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Structure Supply and Demand

  • Primary: Sections of the RINL make have already been put on the market to help with the supply crisis, and the facility is already back in operation, but not in full pace. Additionally, it is the only producer of round bars that are slated to launch next month but are presently unavailable. Even when they are absolutely required, big structural sections are uncommon in many locations. The current shortage of materials is having a major effect on the supply. Due to SAIL's inability to provide the massive demand for structural steel, the RINL facility's restart will help. Consequently, supply is a major issue in the primary segment.
  • Secondary: Secondary mills have ample inventory for standard sizes, so they are not concerned about shortages of the finished product. However, small mills are experiencing a lack of overstock and a shortage of raw materials due to the difficulties in locating billet. Due to the current sluggish demand in the commerce business and the slowdown in demand during the Diwali season, prices are declining.

Structure News

  • JSW Group and South Korea’s Posco Group have signed an agreement to build a 5 million mt per annum (MTPA) integrated steel plant in India. While the investment and location details are undisclosed, industry estimates suggest it may require Rs 40,000-45,000 crore. The partnership will also explore joint efforts in battery materials, electric vehicles, and renewable energy, aiming to drive sustainable manufacturing.

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Expert Opinion

  • This month, all the main manufacturers have raised their pricing due to outside factors. Due to a lack of plant materials, SAIL prices have gone up dramatically.
  • By reducing demand in trader market, slow secondary market activity drives down secondary market prices.