Structural Steel Market Faces Challenges Amidst Fluctuations: Find Out What Lies Ahead In May 2023

The domestic Structural Steel market has experienced a period of limited support despite demand fluctuations. While the prices of Structural Steel have shown an upward trend due to increased Billet rates, trading activities have remained moderate. In this article, we will dive deep into the Structural Steel market.

Current Scenario

• Increased Semi-Finished Steel Trading- One notable trend in the market has been the significant trading activity in Semi-Finished Steel, including Billets and Sponge Iron. Mills have been observed engaging in bulk buying to restock materials for re-rolling, which has also provided a boost to the Finished Steel segment. However, end consumers have exhibited hesitancy in booking materials at higher rates, resulting in lower booking volumes, sources reported to ofbusiness.

• Price Fluctuation- Despite the recent price increases in Structural Steel, a comparison over the past three weeks reveals a decline in prices across the country, ranging from Rs. 1,000-2,000/ton.

• Primary Mills- Mills offered 100 x 50 Channel at different rates, such as Rs. 55,000/ton in Durgapur, Rs. 58,500/ton in Chennai, and Rs. 57,000/ton in Hyderabad, on an ex-works basis.

• Secondary Re-rolling Mills- Mills have also quoted varying prices 100 x 50 Channel, ranging from Rs. 52,000/ton in Raipur, Rs. 51,500/ton in Raigarh, Rs. 55,300/ton in Chennai, and Rs. 53,200/ton in Hyderabad. These prices exclude trade discounts.

Challenges And Market Dynamics

Given the current market situation, it’s unlikely that demand will improve as prices continue to witness a significant decline. Leading manufacturers like JSPL exert considerable influence and dominate the market, particularly in the heavy section, establishing a virtual monopoly. These market dynamics pose challenges for smaller players in the industry.

OFB’s Insight

The Structural Steel market has shown resilience amidst fluctuating demand, with trading activities remaining moderate. Although prices have increased in the short term, a decline has been observed over the past few weeks. Market participants anticipate further corrections in May 2023. It remains to be seen how the market will adapt to the dominance of key manufacturers and navigate the challenges that lie ahead.

Read more: Indian Scrap Market Remains Volatile On Price Recovery In Steel: Will Prices Continue To Remain Uncertain?

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