Weekly Update: Primary Steel Market Set For Further Price Revision

The Steel market in India has maintained a strong footing amid decent steady demand. Anticipations among market participants suggest an upcoming price adjustment in the primary segment, foreseeing a price increase in the week ahead. This price surge can be linked to various factors, including maintenance schedules of mills, escalating raw material costs, challenges related to BIS certification, and the ongoing demand within the domestic secondary market.

Current Offers

The current prices are as follows:

1. Primary TMT

• Ex-Mumbai: Rs. 56,500-57,000/ton
• Ex-Delhi NCR: Rs. 55,500-56,000/ton
• Ex-Vizag: Rs. 54,000-54,500/ton

Note: These prices are GST exclusive and taken into consideration according to working from regional distributors of different primary segment brands throughout.

2.  Hot Rolled Coil 

• Ex-NCR/Delhi: Rs. 58,000/ton
• Ex-Mumbai: Rs. 57,800/ton
• Ex-Ahmedabad: Rs. 58,300/ton 
• Ex-Chennai: Rs. 59,500/ton 
• Ex-Kolkata: Rs. 57,100/ton 
• Ex-Hyderabad: Rs. 59,000/ton

Current Scenario

1. Primary TMT

The primary TMT market received strong support due to significant demand within the local market. During the first half of September 2023, primary mills increased TMT prices. Prices were raised by approximately Rs. 750-2,500/ton across major markets. In certain locations, distributors and traders were even selling at higher prices than the mills, considering stock availability and urgent buyer needs.

Suppliers and distributors are closely monitoring price movements, anticipating another price revision as the market transitions into the second half of September.

NMDC recently raised its iron ore prices, and market participants are also keeping an eye on OMC’s upcoming auction, which is expected to have a higher base price. With the continuous rise in raw material costs, industry experts believe there is room for mills to further increase TMT prices by approximately Rs. 1,000-1,500/ton.

2. Flat Steel Products

The current trend in the Indian Flat Steel market is favourable. Flat Steel prices have remained steady this week, following an initial price increase of Rs. 500-700/ton at the beginning of September. Despite these price hikes from major Steel mills, the market has noticed a stable demand. These mills continue to receive and confirm new orders, securing bookings for the next two months. Although there has been a slowdown in surplus material availability, some suppliers are grappling with limited stock. This scarcity is expected to exert upward pressure on prices, even though the domestic market demand remains at an average level.

Conversely, due to a delay in the Indian government’s renewal of the BIS license, Steel imports to India are anticipated to decelerate further in the second half of 2023. The Central government of India has not provided clear guidance on the timing of the license renewal. Given this scenario, it is recommended that manufacturers of Indian Flat Steel Products (such as HRC and Plates) capitalize on this opportunity to enhance and optimize their production capacity in preparation for the peak demand season starting from October 2023 onwards.

OFB’s Insight

The current market doesn’t suggest a price decline. Buyers are cautiously optimistic about stability. Industry experts foresee positivity next week due to supportive market trends. The Indian Steel market is anticipating potential price adjustments, shaped by consistent demand and rising raw material costs. The direction of Steel prices in India will be critical as the demand peaks in October 2023.