Performance Of Indian Steel Market In The Fifth Week Of 2023

The Indian steel market saw a mixed performance during the fifth week (28 January – 4 February) of 2023 as mid-sized (secondary) steel producers reported low to moderate demand, while primary mills saw a rise in prices.

The prices of mid-sized steel mills for TMT and billets fell by around Rs 200-1,500/ton in the major locations of India, with the sharpest decline of Rs 1,000-1,500/ton recorded in west India. Also, the prices of metallics products (sponge iron and pig iron) fell by Rs 200-1,000/ton, week-on-week, in the fifth week of 2023.

Why Did The Prices Fall?

The main cause of the price decline was a mismatch in demand and supply, as well as declining prices in the north region (Punjab), which puts pressure on the prices of mid-sized steel mills in India. As per the market experts, the weak demand for a few days combined with the rising selling pressure among producers led to a constant fall in prices of mid-sized mills.

In addition, weak market trends in the north region, specifically in Punjab, kept buyers away from taking a position, which puts pressure on the prices of semi-finished and finished steel products.

Primary Mills

The prices of primary mills moved in the opposite direction, rising to Rs 2,500/ton, with finished long steel prices rising by Rs 1,000-1,500/ton, and finished flat steel prices surging by Rs 2,000-2,500/ton compared to the last operated prices in the end of January 2023. The price hike announced by the primary mills for February 2023 led to an increase in prices in the spot market, especially at the distributors’ end.

Strong domestic and export demand continued to support the prices of primary mills. Major infrastructure companies, such as L&T, placed healthy orders during January 2023, leading to good orders for primary mills. Improved demand for exports, due to rising prices of Chinese mills for exports, also supported Indian steel exports, with deals largely concluded in Europe and the Middle East.

Prevailing Offers

With this revision, fresh offers by primary mills for TMT (long steel product) have been recorded at around Rs 63,500-64,000/ton ex-works Delhi and Mumbai. TMT offers from mid-sized mills stood at around Rs 54,000/ton ex-works Delhi and around Rs 58,500/ton ex-works Mumbai.

Coming to flat steel, offers for HRC (hot rolled coil) steel stand at around Rs 60,000-60,500/ton ex-works Delhi and Rs 61,500-62,000/ton ex-works Mumbai through the primary mills. All prices are exclusive of GST.

What’s Next?

In terms of the short-term market outlook, it seems that Indian steel prices are likely to remain strong, especially for primary mills, as they are running short of inventories and global steel prices remain high. However, the declining prices of mid-sized mills remain a key concern, as they may change the demand proportion of primary mills, especially in domestic sales, as the price gap between primary and mid-sized mills hits a record high due to uncertain price movements.

Read more: Indian Major Mills Increases Finished Steel Prices For February 2023