Secondary Structure Prices Turn Volatile, While Primary Stay Strong

The structural steel market in India turned volatile in May, especially for secondary steel mills. Prices are getting heavily influenced by the movement of semis products like sponge iron and billets, prompting significant changes.

The primary segment prices, on the other hand, remained stable after a surge of around Rs 1,000/ton in May beginning by major producers like Steel Authority of India Ltd (SAIL), Jindal Steel and Power Ltd (JSPL), and Rashtriya Ispat Nigam Ltd (RINL).

Trade Dynamics in the Secondary Structural Steel Market

According to data maintained by OfBusiness, the secondary structure prices in India in the major locations such as Raipur and Durgapur recorded a surge of Rs 500-1,000/ton during the first week of May. However, in the second week, it moved down in the same proportion. Coming to the third week, it again improved roughly by Rs 500/ton.

Similar trends are being noticed in north India’s Mandi Gobindgarh and south India’s Hyderabad, Chennai markets, where prices of structures moved down during the past week, while they started to find support in the current week following the improvement in the sponge iron and billet market.

Industry participants reported that since there is uncertainty in sponge iron and billet prices, the structure market is volatile in May.

Challenges in Supply and Production of Structures

In terms of supply, the stock with the mills is less than average due to low productivity in the summer season. Due to heat waves across regions, labour unavailability posed a huge concern for the mills, resulting in lower output.

Primary Structural Market Remains Strong

In the context of primary mills structure, the shortage of material continues. However, since demand is modest, the manufacturers are keeping the prices high. 

A few close sources with the mills reported that the shortage of material is continuing as RINL operations were closed, while JSPL is planning for maintenance works. SAIL’s rolling plans for structure production are delayed too. This has created a shortage of material for ready availability.

Overall, due to the imbalance in supply-demand, the primary market remains supported.

Market Outlook

According to industry participants, the balanced supply, which is currently lower than the usual, is indicative of a supportive structural steel market, be it primary or secondary. Although, if there is a sharp change in raw material prices in the near term, the producers will react accordingly.

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