Indian Mid-Sized Steel Mills Observe Downturn

The eight-week period from 18th February to 25th February 2023 witnessed a consistent decline in the prices of mid-sized steel mills in India. The prices dropped by Rs 300-1,600/ton across various locations, with Delhi NCR region having a significant price correction of Rs 1,600/ton.

The main reason for this drop appears to be the decline in consumer buying confidence and the low demand for semi-finished steel. Another factor that contributed to a decline in prices was higher prices, which loose buying confidence of stockists, which led to softening offers during the week.

Currently, primary mills’ TMT offers (long steel product) have been recorded at around Rs 62,300-63,000/ton ex-works Mumbai and Delhi, while mid-sized mills’ secondary TMT is around Rs 52,300-52,800/ton ex-Delhi and Rs 56,000-56,500/ton ex-Mumbai.

During the week, there were no significant bulk bookings, which caused the market to perform slowly. Due to selling pressure in TMT compared to previous week, sellers had to offer their material at low rates.
The majority of mid-sized (secondary) steel mills were seen clearing pending orders and inventories at plants.

Insight

During the eighth week of 2023, mid-sized steel mill prices experienced a significant decline in the domestic market. This can be attributed to a combination of low demand and continuous price adjustments in the semi-finished steel sector. The decrease in demand may be due to various factors, such as a slowdown in economic activity or a shift in consumer preferences. The continuous price corrections in semi-finished steel also had an impact, causing a ripple effect throughout the steel industry, including mid-sized steel mills. This market trend may have significant implications for the steel industry and the broader economy.

Read more: https://www.ofbusiness.com/blogs/india-weak-demand-weighs-on-sponge-iron-prices/21163