How Is The Indian Steel Industry Performing?

The Steel market has been experiencing limited trades and price decline in the week-opening. Mid-sized Steel mills in the central and eastern regions of India are particularly affected by the poor participation of buyers in the market. The selling pressure has been affected, especially for Sponge Iron manufacturers, who are keen on bulk orders but are yet to receive any. In this article, we will discuss the current market and the factors that have contributed to the price decline.

Current Market Scenario

• Limited Trades And Price Decline In Mid-Sized Steel Mills- The beginning of the week saw low inquiries from buyers with Mid-sized Steel mills in India. This resulted in poor participation on floated offers, which led to a decline in prices for Sponge Iron, Billet, TMT, and Wire Rod. The prices in the week opening fell in the range of Rs 200-800/ton. The Steel prices decline has led to an increase in selling pressure, especially for Sponge Iron manufacturers who are yet to receive healthy orders, Ofbusiness learned from industry participants.

• Weakening Sponge Iron Market Puts Pressure On Billet Prices- The imbalance between supply and demand has resulted in a weakening Sponge Iron market. The consumption of Sponge Iron in the domestic market has decreased due to the lack of demand and seasonal low productivity of Ingot, Billet and TMT manufacturers. The dull-finished Steel sales and the weakening Sponge Iron market have also affected the Billet market, resulting in a disparity between bids and offers. As a result, the prices of Billets have started to decline and recorded a fall of Rs 200-700/ton on 25-26 April 2023.

• Primary Mills Price Movement- In the context of primary mills’ price movement in the Indian Steel industry, there are chances of a slight price reduction for TMT and HR coil through the mills in the upcoming days. The demand has weakened with the mills on floated offers, along with sluggish global trends and declining prices of raw materials such as coal and iron ore.

Current Rates

With price corrections, spot prices of Sponge Pellets stood at around Rs 29,600-29,800/ton, Billets Rs 45,800-45,900/ton, TMT (Fe 500) at Rs 50,000-50,300/ton and Wire Rods at Rs 50,200-50,500/ton ex-works in Raipur, central India.

Market Outlook

Apart from the decline in prices, there is also selling pressure in the market, especially for the Sponge Iron market. This is expected to put further pressure on prices in the coming days. The chances of price recovery are lessened if demand continues to remain on the same line and declining prices of raw materials (Coal and Iron Ore).

OFB’s Insight

The market is expected to remain under pressure in the coming days, with fewer chances of price recovery if demand continues to remain low. The primary mills’ price movement may also experience a slight reduction in prices for TMT and HR coil due to weakened demand and global trends. The Steel prices decrease has led to an increase in selling pressure, especially for Sponge Iron manufacturers.

Read more: Why Indian Pig Iron Market Observed Moderate Response And Price Change?

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