NEW DELHI
Domestic steel prices are expected to remain firm in the near term as tight supply, import duties and elevated raw material costs encourage dealers to build inventories in anticipation of further price increases, according to a Centrum Broking report based on dealer interactions.
Centrum said any correction in steel prices could be limited and may be deferred until late November or early December. Supply remains tight, with allocations from primary producers falling short of demand. Dealers are receiving only 50-75 per cent of the volumes they request, prompting stronger inventory accumulation across the distribution channel.
“Steel dealers have shifted from need-based purchasing to actively building inventory in anticipation of further price increases,” the report said. Centrum noted that while channel activity remains strong, part of the recent demand strength reflects advance buying and inventory accumulation rather than only underlying end-use consumption.
Domestic flat steel prices have remained on a sustained uptrend, supported by supply constraints, maintenance shutdowns, import duties and elevated raw material costs, particularly coking coal. Dealers have continued buying ahead of requirements as they expect prices to rise further.
The report said demand in Gujarat could soften during October-November because of festivals and holidays, but typically strengthens in January-February after the festive period. Potential disruptions to imported or Chinese material around the Chinese New Year could further tighten availability and support domestic mills. In the steel pipe segment, cumulative price increases have reached around Rs 6-7 per kg, with another Rs 1.5 per kg hike announced from October 1. Centrum also indicated that tighter availability could keep channel buying active in the coming months, even as actual consumption patterns vary across regions and end-use sectors differently.
