- Sponge iron prices in Bellary decreased by INR 200-300/t w-o-w
- Chennai billet prices stable despite higher production costs
Raw material movement :
Sponge iron prices in the Bellary cluster declined by around INR 200–300 per tonne week-on-week due to weak buying interest from steel smelters. Demand from Western India buyers, who usually procure material in bulk from the local market, remained low this week because of sluggish downstream steel demand. As a result, both pellet-based and lump-based grades witnessed a similar downward price movement.
At the same time, sponge iron manufacturers are facing pressure from higher raw material costs. Non-coking coal prices remain elevated, which has reduced conversion margins and limited the profitability of producers.
RB2 non-coking coal is currently assessed at around INR 10,400 per tonne ex-Gangavaram Port, excluding taxes.
Meanwhile, melting scrap prices in the Chennai region continue to rise due to tight supply and low inventories at mills. To manage their requirements, buyers have started booking imported scrap through containers to ensure smooth production.
Semi-finished market trends :
In the semi-finished segment, mild steel billet prices in Chennai remained largely stable during the week. Although production costs have increased due to higher raw material prices, suppliers are finding it difficult to raise offers as finished steel movement remains moderate and buyers are resisting higher rates.
Mills are also unable to pass on the cost pressure to medium-scale re-rollers, as their product demand remains steady but not strong. As a result, market sentiment is cautious, and most transactions are being concluded at prevailing levels. The current hovering price for steel billet is around INR 43,000 per tonne under regular payment terms.
Meanwhile, in the Hyderabad and Hindupur clusters, billet prices declined by around INR 500–1,000 per tonne. The correction was mainly due to weak demand from re-rolling mills, which have slowed their procurement amid average finished steel sales.
Finished steel scenario :
Finished steel movement in Chennai is currently moderate, supported by slightly improved project activity in the region. Demand from infrastructure and construction segments has picked up compared to previous weeks, but overall buying sentiment remains balanced, with no aggressive bulk procurement seen in the market.
Inventory levels for large-scale induction route mills, producing more than 1,000 tonnes per day, are maintained at around 18–20 days. This is considered a normal and comfortable range, allowing mills to maintain the availability of all required sizes and grades for regular customers.
Meanwhile, blast furnace route steel prices in Chennai and Hyderabad are assessed at around INR 58,000 per tonne and remain stable on a week-on-week basis. The steady pricing reflects a balanced market with no significant upward or downward pressure at present.
Leading steel manufacturers continue to offer induction route rebars in the local market at prevailing price levels, although selective discounts are being extended in offers to attract buying interest of customers :
Outlook :
Steel prices are expected to remain slightly down trend in the near term due to the upcoming Holi festival, as business activities may slow down during the holiday period. Trading volumes could remain low. However, after markets reopen post-Holi, prices may see some support.
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