South India: Steel market continues to remain weak amid sluggish trends

Scrap and metallics

• Sponge P-DRI (FeM 80%) prices in Bellary, Karnataka were assessed by SteelMint at INR 30,200/t exw (- INR 1,300), and CDRI at INR 31,850/t exw (- INR 1,200) w-o-w. 21,700 tonnes (t) of sponge iron (PDRI and CDRI combined) were traded this week (3-9 November).
• Despite a drop in the suppliers’ offer prices, trading activity in the region increased slightly over the previous week.

Semi-finished and finished long steel

• Some billets deals were concluded from the central and eastern regions to Hyderabad in the week under review. Buyers realised that material from external sources were more feasible for their requirements.
• Demand for finished steel and semi-finished products in Hyderabad continued to be sluggish, although trading activity for billets grew somewhat amid a marginal decline in offers.

Market scenario

• With moderate demand and a shortage of supply, scrap prices (HMS 80:20) in Chennai were assessed at INR 36,800/t DAP basis (-INR 400) w-o-w.
• Hot charging mills decided to temporarily halt operations as a result of persistently weak demand for finished steel in Chennai.

Outlook

As per industry sources, steel prices in the southern Indian market are likely to remain under pressure as the weather continues to disturb construction, infrastructure project works. This coupled with bulk arrivals of imported scrap in coming weeks may keep raw material prices on the lower side.