The domestic Steel market experienced fluctuations throughout the week. Trading activities were disrupted due to the festive mood of buyers, and the market has not fully reopened. Transactions are occurring on an as-needed basis. Domestic mid-sized Steel sellers and brokers are anticipating price recovery next week. With minimal transactions observed this week, Steel producers are optimistic about demand recovery and increased trading activity.

Product-Wise Market Sentiments

Let’s delve into the market movements throughout the week for various steel commodities in major markets:

1. Sponge Iron: When examining the week-to-week comparison, there was a noticeable drop in the price of Sponge Iron, resulting in a decline ranging from approximately Rs. 300-700/ton. However, prices remained somewhat supported, and a rise of around Rs. 100-300/ton was observed in central and southern regions.

On the other hand, buying activity and demand for Sponge Iron remained low, as buyers were still expecting prices to remain firm. As the semi-finished and finished Steel markets saw limited buying activity, there was also a minor reduction in Sponge Iron transactions on a day-to-day basis.

Currently, the PDRI offers in Durgapur is hovering at Rs. 26,500-26,700/ton, while CDRI is priced at Rs. 29,100-29,300/ton on an ex-plant basis.

2. Billet: The domestic Billet market remained somewhat volatile, with prices mostly showing a marginal downtrend of around Rs. 200-700/ton in many locations nationwide. While there was a slight improvement in day-on-day price movement, offers remained firm throughout the day, and fewer trades were executed. Buyers are waiting for prices to decrease further. However, it’s worth noting how the market will perform next week after the festival is over, as stated by one of the brokers in the market.

The current offers for MS Billet are hovering at around Rs. 43,800-44,000/ton for the Mandi-Gobindgarh (Punjab) location on an ex-plant basis.

3. Secondary TMT: Following suit, the mid-sized mill’s TMT market also remained volatile, with prices varying in the range of Rs. 100-700/ton week-on-week in major markets. Due to low buying and limited inquiries, re-rollers had to reduce their TMT offers. Demand in the secondary TMT segment was also limited, with only a limited number of transactions occurring during Muhurta trading in preparation for Dhanteras and Diwali. Experts are closely monitoring the market’s movements for a clearer picture.

4. Flat Steel: Flat Steel suppliers are hopeful as exports resume. Indian Flat Steel suppliers have found a glimmer of hope in the form of resumed export activities. Market participants are optimistic about the resumption of exports to the European Union region. Indian HRC exports had been halted for the past couple of months for other markets outside India.

This surge in export bookings can be attributed to a recent increase in buying interest for downstream products within the European Union. Meanwhile, Indian mills have continued to withhold HRC export offers for Southeast Asia and the Middle East. Demand in the Middle East market has been subdued, and buyers have been adopting a wait-and-watch approach due to the rise in SHFE HRC futures and ongoing geopolitical issues, which have also limited trading activities. Moreover, Indian mills have not yet resumed HRC export offers for the Southeast Asian and Middle East markets as Chinese prices remain competitive.

Market Outlook

At present, market participants are eagerly seeking greater clarity on the future trajectory of the market. Numerous players in the industry are closely scrutinising the pricing strategies of primary mills. The near-term market outlook is marked by uncertainty, as buyers and sellers maintain divergent perspectives.

The market’s elevated volatility has made it highly unpredictable. Given the prevailing uncertainty in the domestic market, industry experts are encountering challenges in arriving at definitive conclusions.

OFB’s Insight

The domestic Steel market faced weekly fluctuations, with trading disrupted by festive sentiments. Sponge Iron prices declined but found support in some regions. Billet prices experienced marginal downtrends, and the market’s post-festival performance remains uncertain.

Secondary TMT prices varied with limited demand, and the Flat Steel market saw optimism as exports to the EU resumed, while Southeast Asia and the Middle East awaited further developments.