Sluggish Demand And Declining Prices Challenge TMT Market In India

Currently, numerous challenges primarily due to sluggish demand and a subsequent decline in prices for both primary and secondary mills are affecting TMT market in India. The rolling mills are worried about increasing inventories concern, resulting in downward pressure on prices. In this article, let’s explore more about the Indian TMT market.

Market At A Glance

• Sluggish Market

The TMT market is experiencing a slowdown in demand, which has resulted in a significant price decline. The sluggish demand has made it challenging for manufacturers to secure orders, leading to an over-supply concern. To tackle this issue, manufacturers have aggressively pursued orders in the spot market. However, liquidity issues have compelled sellers to offer lower conversion rates to move their products.

• Distributors’ Conservative Approach

In response to falling prices and market uncertainty, TMT distributors have become cautious. Limited inquiries from infrastructure and construction further contribute to buyer caution, impacting market sentiments. Distributors are adopting a conservative approach while rolling mills prioritize production capacity to avoid supply-demand mismatches, Ofbusiness learned from sources.

Current Prices

• Secondary TMT- The Secondary TMT prices continuously falling since couple of days, however, the market noticed slight fluctuations yesterday. Mid-sized mill’s current offers for TMT in major markets are as follows:
  • Raipur: Rs. 48,300/ton (up by Rs. 100/ton)
  • Hyderabad: Rs. 52,000/ton (same)
  • Delhi: Rs. 52,100/ton (down by Rs. 100/ton)
  • Jalna: Rs. 51800 (same)
  • Wardha (Sangam TMT): Rs. 49,200/ton

• Primary TMT- Considering the poor demand and sluggish movement of material, Primary mills have reduced their prices by Rs. 500/ton. The current operative prices for primary TMT are as follows:
  • Ex-Mumbai: Rs. 55,000-55,500/ton
  • Ex-Delhi NCR: Rs. 55,000-55,500/ton
  • Ex-Vizag: 53,000-53,500/ton

Note: The above prices are the prices offered by companies directly to the institutional and corporate buyers and retail prices are Rs 1,000/ton more than the prices mentioned above.

Market Outlook

The current outlook for TMT prices suggests a scenario of potential instability or downward pressure. While there is a possibility of relief if there is a shift in demand and positive global market trends, the persistence of sluggish trends could compel mills to take further measures such as reducing prices. This is due to the accumulation of inventories with distributors and plants.

OFB’s Insight

The Indian TMT market faces challenges with sluggish demand, leading to price declines. Limited inquiries, inventory accumulation, and weak demand from construction sectors worsen the situation. However, a positive outlook expects recovery driven by infrastructure development, necessitating proactive and innovative strategies for industry players.

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