Why Indian Steel Prices Remained Unstable In Week 13 Of 2023?

For the steel industry, week 13^th (25 March 2023-1 April 2023) remained volatile due to low to moderate demand for finished steel products, especially TMT. This has brought fluctuations in semis prices (sponge iron and billets products). A few primary TMT mills have witnessed production cuts at plants due to low demand and kept offers range bound. Mid-sized mills were seen clearing pending orders during the week. Demand for the Flat Steel market remained supported as mills have booked orders in advance for the coming two months (April 2023 and May 2023). Global demand raised for Flat Steel products, especially from the European region. Sellers were seen taking advantage of this and increased HRC and CRC prices in the domestic market.

In this article, let’s discuss the factors that led to price fluctuations and the prevailing prices of TMT and flat steel products.

13^th Week’s Highlights Of Indian Steel Industry

• Supply And Demand Dynamics

Despite the steady supply from mid-sized steel mills, the market saw an increase in inventory due to low-to-average demand. This caused buyers to exercise caution and place orders as per their immediate needs. Furthermore, the market experienced liquidity constraints due to the end of the fiscal year, resulting in a reduction in fresh orders by bulk buyers. As a result, the total number of orders placed during the week decreased.

• Mid-Sized Steel Mills’ Prices Volatility

TMT- Mid-sized steel mills’ TMT prices recorded a slight rise of Rs 200-300/ton. Also, sponge iron and billet prices witnessed a marginal hike of Rs 200-400/ton in a few Indian markets.

Pig Iron- Due to a large supply and weak demand, the Indian pig iron market’s downward price patterns persisted, with prices dropping by Rs 300–500/ton in a week.

• Primary Mills Prices

Primary mills’ TMT prices remained under pressure and fell by up to Rs 700/ton week-on-week in major locations due to low demand and limited future orders. Flat steel products’ spot prices remained more or less stable through the mills’ end.

Steel Products Prevailing Prices

TMT- For 10-25 mm TMT, primary mills’ prices remained approximately Rs 60,500-61,000/ton ex-yard Delhi. Mid-sized mills’ secondary TMT prices were around Rs 55,000/ton ex-Delhi and Rs 55,500-56,000/ton ex-Mumbai.

HRC- For 1.8mm/IS2062 HRC, the prices were around Rs 59,500/ton ex Delhi NCR, Rs 60,000-61,000/ton for Chennai, Mumbai, and Ahmedabad on an ex-yard basis.

CRC- CRC prices are reported at Rs 65,000/ton ex Delhi NCR, Rs 65,000-65,500/ton for Mumbai and Ahmedabad, and Rs 66,000/ton for Chennai on an ex-yard basis.

Insight 

Industry experts are estimating that steel prices are likely to find support when spot demand finds support. So far, most participants were engaged in healthily closing their fiscal year books. Now that’s done, an improved payment cycle is likely to result in fresh orders from major buyers. However, the price instability is estimated to persist until demand stabilizes.

Read more: Here’s Why Suppliers Are Optimistic For FY24 Despite Indian Pig Iron Prices Facing Pressure

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