Indian secondary structure market has reported negative sentiments, except in south (Hyderabad) this week post demonetization. As per market participant finish long 15-20% trade from small manufacturer and traders were in cash basis. This has impacted the value chain and low volume trade is in standstill.
“We are watching secondary sector very closely because a lot of that business used to happen on cash. And maybe 60-70% of the long products business is actually driven by the secondary sector. So it could have a significant positive impact on the long products business for the integrated or bigger players,” Tata Steel India and South-east Asia managing director T.V. Narendran said in an investor call.
He also added “But in any case, market was shifting towards integrated sector because between JSW Steel Ltd, Tata Steel Ltd, Rashtriya Ispat Nigam Ltd (RINL) and Jindal Steel and Power Ltd (JSPL) and everyone else, lot more long products capacity is being added over the last few years, which is encouraging the consumer segments to shift towards formal sector. But, demonetization move should accelerate that process”.
“Rural demand, which is largely cash-based, will get impacted temporarily. Our dealings with our distributors are largely on real-time gross settlement systems (RTGS), and the dealings of our distributors with their dealers is largely on RTGS. Its only the final consumers who tend to pay cash,” Narendran said. He further said, “So there could be some sort of hiccups there for sometime. But, I don’t think, we see it as a big issue over a long period of time. We are interested to see what’s happening in the real estate markets and the impact it will have there. But, otherwise, the rural markets, we think, will pick up very quickly.”
Secondary Structure Outlook this week:
Prices have moved up by INR 1,500/MT in Hyderabad amid billet prices have moved up by INR 1,000/MT in South.
In context to raw material, 125×125 mm billet prices are assessed in the range of INR 21,000-24,900/MT; have fallen down by INR 200-1,100/MT W-o-W.
Meanwhile, 100×100 mm angle are evaluated at INR 27,000/MT in Durgapur, at INR 26,000/MT in Ahmedabad, at INR 26,000/MT in Raipur and INR 28,500/MT in Hyderabad.
Current 200×75 mm channel are offered at INR 26,000/MT in Durgapur, at INR 30,100/MT in Ghaziabad, at INR 26,200/MT in Ahmedabad, at INR 28,300/MT in Mumbai and at INR 26,000/MT in Raipur.
Heavy 200×100 mm beam is available at INR 26,000/MT in Durgapur, at INR 29,600/MT in Ghaziabad, at INR 26,000/MT in Ahmedabad and at INR 28,900/MT in Mumbai.
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