Price Decline And Global Challenges Impact India's Structure Market

The Structure market in India has continued to face sluggishness and weak demand throughout May 2023. Despite poor performance in the domestic Steel market, primary mills have struggled to maintain steady Structure offers. To clear existing stock, distributors and traders have resorted to offering attractive discounts. However, slow dispatches have been a challenge for mills due to cautious buying approaches from buyers.

International Market Impact 

The sluggishness in the international Steel market has had a significant impact on Indian domestic trade. China, which accounts for about 50-55% of the world’s Steel production, is facing its own set of challenges, including a slow economic recovery, contraction in manufacturing activity, declining imports, and low industrial production growth. The Chinese construction sector, a major consumer of Steel, has experienced a notable decline in property investment, indicating weak demand for new housing and continuous drops in property prices.

Price Movement

In May 2023, Indian Structural Steel witnessed a downward price movement of around Rs. 2000-3,000/ton MoM. However, a major fall was observed in the Southern region. When comparing prices from the last week, secondary Structure offers have plunged by Rs. 1,000-2,000/ton, with the Hyderabad market experiencing a mass decline.

Current Prices

• Primary Channel (100 x 50)
  • Ex-Durgapur: Rs. 55,000/ton
  • Ex-Chennai: Rs. 58,500/ton
  • Ex-Hyderabad: Rs. 57,000/ton

• Secondary Channel (100 x 50)
  • Ex-Raipur: Rs. 50,500/ton
  • Ex-Raigarh: Rs. 50,600/ton
  • Ex-Chennai: Rs. 53,000/ton
  • Ex-Hyderabad: Rs. 51,800/ton

Note: These prices exclude trade discounts.

Market Outlook 

Given the current market conditions, it is highly anticipated that the secondary market will undergo further price reductions. The market is exceptionally weak, with numerous order cancellations due to instability. Price reduction becomes a crucial factor for businesses in such circumstances, and it is expected to be a response to the prevailing market conditions.

OFB’s Insight

The domestic Structure market has faced a challenging month. Despite efforts from primary mills to keep offers stable, distributors and traders have offered discounts to clear existing stock. The International Steel market decline, particularly in China, had a ripple effect on the Indian market, further impacting demand and prices. Looking ahead, it is expected that the secondary market will experience price reductions in responding to the prevailing market conditions.

Read more: Stable Pellet Prices In Central India Despite Iron Ore Price Decline

For real time commodity prices, latest news, and insights, please download the all NEW and all FREE OfBusiness APP