Structure Update: Secondary Market Shows Growth; Supply Issues Persist in Primary

Key Highlights

• Price Adjustments Across Markets: Secondary prices have increased in key regions, while primary market prices have seen reductions, with SAIL and RINL cutting rates.
• Supply Challenges in Primary Market: Despite the operational SAIL IISCO facility, certain structural materials remain in short supply, including specific MS Angle sizes.
• Secondary Market Demand Growth: Secondary mills are not facing shortages, but iron ore supply issues could affect future stockpiling. Demand remains modest.
• BIS Certification for Chinese CRGO Steel: BIS will issue compliance certificates to Chinese steelmakers to address the domestic shortage of cold-rolled grain-oriented steel.
• Market Outlook: The primary market is declining, and while the secondary market is temporarily rising, it is expected to fall due to low demand and regulatory challenges.

Structure Price

• Secondary Market: Raipur stable, Mandi up by Rs 100, Hyderabad and Chennai up by Rs 300, Durgapur up by Rs 200.

• Primary market: In this month’s price revision, SAIL is down by Rs 500/mt, JSPL rolled over the rates & RINL is down 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. 47,300/mt

• Ex-Raigarh: Rs 46,000/mt

• Ex-Chennai: Rs. 47,400/mt

• Ex-Mandi Gobindgarh: Rs. 47,300/mt

• Ex-Durgapur: Rs. 44,300/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: As of now, the SAIL IISCO facility is up and running. Heavy structural materials, which are currently hard to find in India, should be easier to find as a result. The market still lacks some MS Angle sizes, nevertheless, and this issue must be fixed by the end of this month. The supplier is delivering these sizes slowly. In addition, the previously unavailable RINL round bars are now being manufactured. JSPL sections take four to six weeks to build and are challenging to get. Therefore, supply is a major issue in the primary sector that needs to be fixed before the end of this month.
• Secondary: Since secondary mills have enough resources with them, they don't have to worry about finished goods shortages. However, demand is modest and there is a shortage of iron ore, which could lead to problems when creating new stockpiles.

Structure News

BIS is set to issue quality compliance certificates to three Chinese steelmakers for cold-rolled grain-oriented (CRGO) steel, in response to shortages flagged by Indian transformer manufacturers. The certification follows new rules requiring BIS approval for non-pre-certified imports. India’s domestic production meets only 7% of CRGO demand, prompting the certification for Chinese makers with a total capacity of over 1.7 million mt. This move comes amid concerns over Chinese steel dumping in India.

Expert Opinion

The primary market seems to be declining, while the secondary market's rising trend is only temporary and is anticipated to drop over the course of the next week due to low demand. Construction activities being disallowed due to pollution, and GRAP 4 being implemented in numerous regions.