TMT Re-bar prices raised upto INR 2,700/MT in a month’s time owing to high semi finish prices and low production on labour shortage.
Presently, TMT market is witnessing upward trend. Offers have gained strength upto INR 2,700/MT M-o-M.
Market Participants believe the reasons are:
1. Labour Shortage: Elections & summer season have created labour shortage in rolling mills which led to low production and so on high TMT offers.
2. High Semi Finish Offers: Shortage of Scrap in the steel market pushed semi finish prices up. MS Ingot & Sponge iron prices increased upto INR 2,100/MT & INR 1,200/MT M-o-M respectively. Sources said that shortage of Sponge iron could also support high semi finish offers.
3. Demand remains above Average: Decent demand of TMT supporting steel market high offers. In past few days, we have seen sellers quoting high offers and buyers first remain reluctant and gradually accept it, as correction could not able to stay. Market participant said, presently local demand is below average, whereas other state buying remain firm.
High TMT Offers increased Conversion Margin
Ingot to TMT conversion margin has increased by INR 1,050/MT, INR 400/MT and INR 250/MT in Raipur, Mumbai & Muzaffarnagar respectively.
In this month, TMT prices increased upto INR 2,700/MT M-o-M, while MS Ingot offers moved up by INR 2,100/MT. Moreover, TMT gauge difference has increased by INR 500-700/MT in a few states such as Chhattisgarh, Hyderabad & Maharashtra (except Mumbai), which led conversion margin to rise.
Whereas, primary producers are likely to boost up their offers by INR 700-1,000/MT owing to shortage of material (TMT) and hike in secondary TMT prices.
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