Structure Update: Secondary Market Faces Stability While Primary Fixes Supply Issues

Key Insights

• Primary Market Price Increase: SAIL, JSPL, and RINL have raised prices by Rs 500/mt in January, with regional base prices ranging from Rs 44,400 to Rs 59,250.
• Secondary Market Stability: Secondary market prices remain steady across various regions, with no major price fluctuations despite low demand.
• Supply Issues in Primary Market: Supply issues, particularly with heavy beams and channels, are being addressed, with SAIL’s IISCO facility expected to fulfill orders by month-end.
• Secondary Market Discounts: Secondary mills are offering discounts due to low demand but remain well-stocked with finished material.
• JSW Steel Production Growth: JSW Steel saw a 2.3% increase in Q3 production, with Indian operations performing at 91% capacity, contributing to overall steel market stability.

Structure Price

• Secondary Market: Secondary markets stable in all region.

• Primary market: In this month’s price revision, SAIL, JSPL and RINL are all up by Rs 500/mt.

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

• Ex-Raipur: Rs 45,400/mt

• Ex-Hyderabad: Rs. 46,700/mt

• Ex-Raigarh: Rs 45,400/mt

• Ex-Chennai: Rs. 47,100/mt

• Ex-Mandi Gobindgarh: Rs. 47,300/mt

• Ex-Durgapur: Rs. 44,400/mt

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

• Ex-Durgapur: Rs. 55,750/mt

• Ex-Chennai: Rs. 59,250/mt

• Ex-Hyderabad: Rs. 57,750/mt

• Ex-Ahmedabad: Rs. 58,250/mt

• Ex-Ghaziabad: Rs. 56,250/mt

Structure Supply and Demand

• Primary: Even though the SAIL IISCO facility is currently fully operational, the distributor still cannot access certain Heavy Beams and Channel. According to SAIL's rolling schedule, these parts are set to arrive by the end of this month. Moreover, suppliers are now offering RINL round bars that were not available before. The main issue with supply at the moment is being fixed.
• Secondary: Secondary mills are unconcerned about shortages since they possess ample finished material. However, the producer is providing a discount due to the low demand, and market are stable.

Structure News

JSW Steel's consolidated crude steel production increased by 2.3% to 7.03 million tonnes (MT) in Q3, compared to 6.87 MT last year. Indian operations saw a 3% rise in production to 6.82 MT, up from 6.63 MT. Capacity utilization at Indian operations (excluding trial runs) was 91% for Q3. Production and capacity were impacted by maintenance at one of the Dolvi Blast furnaces in October, which resumed in November. JSW's 5 MTPA steel project at Vijayanagar is progressing, with the commissioning of a 4.5 MTPA blast furnace and sinter plant, and one converter and caster at the Steel Melt Shop during Q3.

Expert Opinion

This month, prices rose in the primary market, whereas low demand is expected to cause a drop in the secondary market this week.