Steel Market Faces Pressure in Chennai, Hyderabad, Bellary

The induction furnace (IF) steel market in Chennai, Hyderabad, and Bellary saw notable price corrections on December 2, 2024, as mills adjusted their offers downward across key products. Price reductions ranged from INR 100-500/t, reflecting market pressures and sluggish demand.

Chennai:

The Chennai steel market experienced moderate price declines. Billet prices fell by INR 200/t to settle at INR 41,800/t, reflecting soft buying activity. Meanwhile, rebar (Fe 500) prices remained stable at INR 46,000/t, supported by steady demand from construction sectors. The scrap market, however, held firm at INR 32,000/t despite muted trading.

Hyderabad:

In Hyderabad, prices took a sharper dip. Rebar (Fe 500) offers saw the steepest decline among southern cities, dropping by INR 500/t to INR 43,500/t. Billet prices also slid by INR 300/t to INR 39,300/t, pressured by limited bookings and increased supply from mills. The PDRI sponge iron market remained steady at INR 25,800/t, showcasing resilience amidst fluctuating conditions.

Bellary:

Bellary reported marginal price corrections across major products. Sponge iron (CDRI) dropped by INR 100/t, settling at INR 26,100/t, while rebar (Fe 500) prices decreased by INR 400/t to INR 45,000/t. The billet market saw no significant movements, maintaining stability as regional buying interest remained weak.

Market Insights:

Market participants reported slower trading activity during the morning, influenced by inventory pressure and reduced demand. Mills faced challenges liquidating stocks and resorted to competitive pricing to attract buyers. However, a slight improvement in demand was observed later in the trading session as buyers responded to lower prices and trade discounts.

Despite the price correction, sellers remain cautious due to high inventories and limited buying interest. Market analysts predict a continuation of range-bound trends in the short term as mills balance supply with ongoing demand fluctuations.