Flat Steel Prices Continue To Remain Under Pressure: Motilal Oswal

Motilal Oswal Report

Domestic prices for long steel on the IF route, which accounts for around 65-70% of the overall long steel market, witnessed a price improvement of Rs 600/tonne week-on-week to Rs 49,500/tonne. This increase was driven by higher demand and rising raw material costs.

In line with the improvement observed in IF route long steel prices, prices in for primary rebar the project segment appear to have bottomed out, with an increase of Rs 200/t week-on-week to Rs R51,800/tonne.

We believe, multiple public holidays in March-April 2024 along with the financial year-end liquidity crunch and slowdown in the project segment will keep the overall demand for long steel under pressure with only need-based buying.

Flat steel prices continue to remain under pressure with prices further declining Rs 400/tonne week-on-week at Rs 52,700/tonne. Considering the subdued demand, higher imports and narrow spreads between flat-long steel prices, tier-I mills are expected to roll over the list prices for March-24 deliveries.

Higher imports continue to post near-term challenges for domestic mills with hot rolled coil and plates import in Feb-24 at 0.64 mt (up 40% month-on-month) and imports in March-24 already crossing 0.2 mt.

Indian mills’ offerings to the export market have remained subdued due to stiff competition from producers in China and Vietnam.

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