Supply Shortages Hit Primary Structure Market, Secondary Prices Drop
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The primary market for steel structures saw price increases this month. However, supply issues are a concern, particularly due to the ongoing maintenance of the IISCO facility, which produces high-demand structures. Meanwhile, the secondary market remains stable for conventional sizes but is facing a decline due to reduced demand and the falling price of iron ore in China.
Key Highlights
- Price Trends: Secondary market prices stable in major regions, with minor declines in Mandi and Durgapur.
- Supply Chain Issues: IISCO facility maintenance causes delays in premium structures; RINL and JSPL face supply shortages.
- Market Pressures: Steel industry pushes for anti-dumping measures due to rising imports from China, Japan, and Vietnam.
Structure Price
Secondary Market: Raipur, Hyderabad and Chennai are stable, Mandi down by Rs 100 and Durgapur down by Rs 200.
Primary market: As per new monthly price revision, SAIL increased prices by Rs 750/mt, RINL increased price by Rs 1000/mt and JSPL rates are rollover in this month.
The offers for 100 x 50 Channel in the Secondary Steel market are as follows:
Ex-Raipur: Rs 46,700/mt
Ex-Hyderabad: Rs. 48,000/mt
Ex-Raigarh: Rs 46,700/mt
Ex-Chennai: Rs. 49,000/mt
Ex-Mandi Gobindgarh: Rs. 47,700/mt
Ex-Durgapur: Rs. 44,900/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: Heavy structures like NPB, WPB, and others that are in high demand throughout India and sold at premium prices are being held up by the IISCO facility. The facility has been undergoing maintenance for the past 15 days and will take another month to begin production. It has resulted in a significant problem with main material supply. The RINL factory has already resumed to assist with the supply problem. It should be supplied next month, however RINL is the only manufacturer of round bars that is now out of stock. The JSPL section is similarly underserved by the market, and it takes them two months to deliver the material after an order is placed. As a result, a big problem in the primary segment is supply.
- Secondary: Secondary mills have adequate inventory for standard sizes, so they are not concerned about material shortages. Raw resources for new stock, however, are in short supply. Alongside the decline in the price of iron ore in China, the secondary market's potential will also decline in the days ahead. The mills are currently experiencing a closure of inquiries, and the secondary market is receiving inquiries as the market price declines. There is now very little demand for trading on the secondary market.
Structure News
- India's steel industry has urged the government to impose a temporary tax to counter rising cheap imports from China, Japan, and South Korea.
- The ISA, representing major firms like JSW Steel and Tata Steel, also flagged Vietnam's shift from a buyer to an exporter of steel to India. An ongoing anti-dumping probe into Vietnamese steel imports began in August.
Expert Verdict
- This month, JSPL rolled over the rates, while SAIL and RINL raised theirs by Rs 750 and Rs 1000/mt, respectively. The 45-day maintenance time for the IISCO facility and the severe lack of plant supplies for enormous beams and NPB, which are sold for exorbitant prices, are the root causes of the supply issue. Secondary market prices are consequently falling.
Daily Market Report
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