OfBusiness Structure Dailies

8th May’23

Price

• Steel prices surged due to the Russia-Ukraine war a year ago, but later dropped, leading to lower profitability. Domestic operations’ Ebitda fell 35.47% to Rs. 8,091 crore compared to the previous year.
• Primary mills’ offers for 100 x 50 Channel were around Rs. 55,000/ton, Rs. 58,500/ton, and Rs. 57,000/ton for Durgapur, Chennai, and Hyderabad, respectively, on an ex-works basis.
• Secondary re-rolling mills were offering 100 x 50 Channel at around Rs. 51,500-51,800/ton, Rs. 51,300-51,700/ton, Rs. 55,000/ton, and Rs. 53,000-53,500/ton ex-Raipur, ex-Raigarh, ex-Chennai, and ex-Hyderabad respectively. This prices are excluding trade discounts.

Demand and Supply

• The market’s low demand persists as buyers anticipate further price drops, leading to scarcity. Despite reducing production, factories experience sales pressure due to excessive stock and are urging bulk bookings through dealers. Distributors place cautious, need-based orders due to existing high inventory.

News

• Buyer restraint in the Indian Steel trade hampers market activity, anticipating price declines. This sector, including primary mill dealers and sub-dealers, constitutes a quarter of the nation’s Steel consumption.

OFB’s Opinion

• The current market scenario offers limited demand prospects due to significant price reductions. Hence, there is no scope for demand improvement.