Steel market in India maintained stoic silence on 1st March. With the activity in both flat and long segment on a low key for the past fortnight the entry in March was lackluster. Stockiest and traders after a marathon run in January and early February had barely any scope for further buying till the old stocks are consumed.
In the flat market particularly the downstream demand of finished products is languishing. The inventory with the intermediaries is choking the supply chain. In this backdrop it is learnt that most of the manufacturers have proclivity for roll over.
Although in some quarters murmurs of small price increase are heard but that is expected to even out with monthly rebates. It is also learn that there is about 300,000 tonne of cheap imported HRC at Mumbai at old levels which portends to play havoc in the market. This material is easily available at INR 38000 per tonne to INR 39000 per tonne EX yards.
The situation in long product prices is equally ambiguous with the market reeling under severe correction over the past 1 month and the input material prices remaining volatile. The pall of uncertainty promises to prolong into March as the transactions remain abysmal. The only silver lining being existence of wide gap of nearly INR 5,000 to INR 6,000 per tonne between secondary and primary prices, giving rise to a chance for the secondary sector as the sole resort for the retail buyers. The primary manufacturers in any case put their stakes on project demand at the neglect of retail.
It is learnt that the scrap is still scarce for the furnace owners as the international levels are still high with imported scrap available at INR 22,000 per tonne to INR 23,000 per tonne excl ED and VAT). Some furnace owners in South are reporting scarcity of scrap which might culminate in supply constraint of downstream products in the next fortnight, thereby giving the propensity for hike in long prices in the second half of March. The secondary and primary manufacturers would opt to maintain current levels if not reduce it.
The price levels for flat and long is expected to remain unaltered in March as dynamics are evenly poised making the manufacturers play safe till the cloud clears.