TMT Bar Prices Dip Amid Weak Demand, Stable Supply

Key Highlights:

• TMT prices fall across North, West & South India as demand remains sluggish.
• Distributors maintain healthy stock levels to avoid supply chain disruptions.
• RINL awards Rs 210 Cr billet conversion contract to Steel Exchange India.
• Zojila Tunnel sees 70% completion, with major steel consumption from SAIL.

Price Drop Across Key Regions

• Ex-Mumbai: Rs. 45,500 – 46,000/ton
• Ex-Delhi NCR: Rs. 47,500 – 48,000/ton
• Ex-Vizag: Rs. 46,000 – 46,500/ton

Note: Distributors across North, West, and South India have decreased prices. The above pricing reflects these changes.

Demand & Supply: Weak Demand Prompts Seller Adjustments

• Prices have continued to fall in response to broader market trends, highlighting ongoing weakness in the sector.
• To address sluggish demand, sellers are lowering prices to stay competitive. At the same time, distributors are maintaining consistent inventory levels to ensure product availability and prevent any supply chain disruptions.

Market News: Zojila Tunnel Fuels Steel Demand

• For conversion of 1.20 lakh tons PA billets into Vizag Steel TMT rebars
• Steel Exchange India has been awarded the conversion contract by Rashtriya Ispat Nigam Ltd. (RINL) to convert 1.20 lakh tons of billets per annum into various sizes of TMT bars under the VIZAG STEEL brand. The conversion will be carried out at the company's new rolling mill, enabling better capacity utilization and increased revenues.
• The two-year contract, which can be extended by one year, is valued at up to Rs 210 crore (up to Rs 70 crore per annum for three years).

Zojila Tunnel Project Update

The under-construction Zojila Tunnel is set to become India’s longest road tunnel and Asia’s longest bi-directional tunnel.

• The project is utilizing over 31,000 tonnes of steel, including TMT rebars, structurals, and plates.
• Steel Authority of India Ltd. (SAIL) is the single largest steel supplier for the project.
• SAIL has supported major infrastructure projects including the Chenab Railway Bridge, Atal Tunnel, Bandra-Worli Sea Link, Dhola Sadiya, and Bogibeel bridges.

Constructed at an altitude of 11,578 feet in the challenging Himalayan terrain, the 30-kilometer tunnel is expected to be completed by 2026. It will provide all-weather connectivity between Srinagar and Leh, via Dras and Kargil.

The tunnel is part of the Srinagar-Kargil-Leh National Highway and will significantly enhance both civilian and military mobility.

According to Union Transport Minister Nitin Gadkari (as of March 27), the project is 70% complete. Initially estimated at Rs 12,000 crore, it is now expected to be completed at around Rs 5,500 crore.

The project includes a Smart Tunnel or SCADA system, using the New Austrian Tunneling Method. The tunnel is equipped with CCTV, radio control, uninterrupted power supply, and ventilation systems.

Expert Opinion and Market Outlook

• As demand continues to decline, producers are offering larger, though targeted, price reductions. If weak demand persists, further price cuts are expected in the coming week.
• The slowdown is evident across both primary and secondary markets, indicating a broad decline in purchasing activity and increased consumer caution.
• On the supply side, conditions remain stable. Distributors have adequate inventory to meet current demand, and there are no immediate concerns about shortages or logistics. Manufacturers are seeing a drop in new orders and are scaling back production to avoid excess inventory and maintain smooth operations.