Mid-Sized Steel Mills’ Prices Changed In The Sixth Week Of 2023

The prices changed primarily due to the ongoing mismatch in supply and demand, along with negative price trends in the northern region, particularly in Punjab. In addition, declined raw material prices and rising inventories also weighed on steel prices. The surplus of steel from mid-sized mills in the market added pressure on prices.

Mid-sized steel mills’ prices saw a constant drop in prices during the sixth week (4 February- 11 February) of 2023. With the sharp fall in prices, the current offers stand over a month low as the same range was last recorded during December 2022.

Declined Prices

TMT and billets prices saw a decline of Rs 500-2,000/ton in major locations of India, with the sharpest decline recorded in west India at Rs 1,500-2,000/ton. Sponge iron and pig iron prices also saw a decline of Rs 300-1,000/ton, week-on-week. 

Impact On Primary Mills

After a significant rise in the past few weeks, primary mills’ prices remained stagnant this week. Industry experts have reported that primary mills are running short of stock in some specific products and hence, are keeping their finished steel prices higher, despite the price reduction by mid-sized (secondary) steel mills.

The primary mills have been largely benefiting from improved export demand for flat steel products, with better realizations, and healthy long steel demand from major government construction activities.

Prevailing TMT Offers

Currently, primary mills TMT offers (long steel product) have been recorded at around Rs 63,500-64,000/ton ex-works Mumbai and Delhi, while mid-sized mills TMT offers stood at around Rs 53,500-54,000/ton ex-works Delhi and Rs 56,500-57,000/ton ex-works Mumbai. The price gap between the two has reached a record high of around Rs 7,000-9,000/ton in Mumbai and Delhi, which as per market experts, should ideally be around Rs 3,000-4,000/ton.

Prevailing HRC Offers

In the case of flat steel, offers for HRC (hot rolled coil) steel stand at around Rs 60,000-60,500/ton ex-works Delhi and Rs 61,000-61,500/ton ex-works Mumbai through primary mills. Prices are exclusive of GST.

Future Prospects

The short-term outlook for the steel industry in India remains uncertain due to factors affecting steel prices, such as demand, inventories, and raw material prices. However, based on current market conditions, it can be assumed that the mid-sized steel mills’ prices may continue to be under pressure in the short term, as the ongoing mismatch in supply and demand remains a concern. 

Insight

The decline in prices has increased the selling pressure on producers, forcing them to reduce their prices to attract buying inquiries.

Read more: Ferrous Scrap Prices Impacted In India Due To Changed Steel Prices