TMT steel prices slip Rs 500/ tonne

TMT structural steel prices have declined steadily in Mumbai by Rs 500 per tonne in the last seven days due to the lack of demand from the construction sector. Structural steel for rolling mills are quoted at Rs 24,000 per tonne while structural steel main is being sold at Rs 27,000 per tonne.

"This is a temporary phenomenan and steel prices would pick up momentum soon as steel enjoys all the fundamental support. With the government lining up several infrastructural development programmes, steel consumption is set to get a quantum jump. Therefore, I do not see the current phase of depressed prices will continue even for a short period," said Dhanpat Gupta, a leading trader and owner of Soorajmull Baijnath Ltd in Mumbai.

The demand from the construction sector starts soon after Dussehra. But this year, excess rains in various parts of the country coupled with less demand from the exports market such as the US resulted in depressed demand for steel.

"The demand from inhouse consumers has also declined marginally because of the festival season. This year the demand from Gujarat and Maharashtra has been low. We are just waiting for order flow to start," said Ashok Ghia, ex-president of Steel Chamber of India. and a big Mumbai trader.

This year the decline is significant as all the integrated steel producers are adding huge capacity at their existing facilities and a lot of greenfield projects are targetting Indian markets.

This is worth mentioning that all grades of steel prices have declined across the country due to demand recession.

"Traders have steel stocks in plenty as they have to cover their annual contract with producer," said Gupta of Soorajmull Baijnath.