Weekly Update: Primary Steel Market Supported, Mid-Sized Market Varies
2 months ago
Mild Steel
Mild Steel

Weekly Update: Primary Steel Market Supported, Mid-Sized Market Varies

Primary mills raised prices by Rs. 500-1,000/ton weekly during September end. Whereas, the mid-sized market saw some instability and prices varied by Rs. 500-1,200/ton. Steel prices are likely to increase further in the first week of October.

In the final week of September 2023, major Indian primary Steel players made significant revisions to their pricing structure, marking the second adjustment of the month. Prices across various primary segments saw an upward surge, elevating by approximately Rs. 500-1,000/ton on a week-on-week basis. This pricing dynamics shift was propelled by the sustained and substantial demand within the domestic market.

Domestic Advantage

The domestic market proved to be a stronghold, with a consistent and decent Steel demand. Encouraged by this, Indian mills strategically shifted their focus from the uncertainties of the international market towards meeting the Steel demands within the country. This pivot allowed them to cater to the local needs more effectively and capitalize on the strong domestic demand.

Global Challenges

Contrastingly, the global Steel market presented a volatile landscape characterized by erratic price fluctuations and a slowdown in buying activities. Certain international markets were relatively inactive due to ongoing vacation seasons, contributing to the sluggish buying trends. Amidst this, Chinese Steel mills emerged as significant contenders, capturing global buyers with highly competitive offers, significantly cheaper than their counterparts. This posed a challenge to Indian mills in the fiercely competitive export market, impacting their export potential.

Navigating Through Uncertainties

Despite the fluctuations, mid-sized TMT mills expressed optimism regarding the secondary market for October 2023. In the current scenario, their strategy involved clearing surplus material stock at the plant, making room for new opportunities. In this endeavour, some mills opted to adjust or reduce profit margins to make the sale more attractive. However, buyers, now armed with substantial bookings, have adopted a more cautious approach to procurement, slowing down their purchasing pace.

Market Outlook

The scenario was marked by volatility and subdued demand within the secondary Steel segment. Prices experienced a decline ranging from Rs. 500-1,200/ton across Semi-Finished and various long-rolling products, reflecting the market pressure. The ongoing sluggish demand, both in Semi-Finished and finished Steel sectors, contributed to the subdued dynamics within the secondary Steel segment.

OFB’s Insight

Industry players are hopeful for a positive shift in October 2023. Market experts predict that the primary mills may implement Steel price hikes in the first week of October, adding to the sense of optimism. Market participants are keenly observing the pricing policies and strategic moves of primary mills, anticipating a supportive trend to unfold shortly.

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