Steel prices soften by Rs 500-700 in Punjab due to rains

With torrential rains slowing down construction activity in the northern region, prices of steel in Punjab have softened by Rs 500-700 a metric tonne (MT) in the past four days.

"There has been a decline of Rs 500-700 in steel prices in Punjab in the last few days because of rains, as demand for steel from the construction sector has dropped considerably," Raj Sood, a Mandi Gobindgarh-based steel trader said.

Consequently, prices of steel ingot have come down to Rs 27,500 per MT against Rs 28,200 per MT four days back, traders said.

Already facing sluggish demand, the rains have further compounded the woes of local steel-makers here. "There was already less demand for steel from all the sectors and now rains have further squeezed demand, causing a fall in steel prices," traders said.

Notably, rates of steel ingots, which are a key input for rolling mills, have remained stable at Rs 28,000 per MT for the last two months in the state on account of depressed demand.

Due to the dearth of demand, steel-makers have been operating their units at 50 per cent capacity. "We have been running 50 per cent of installed capacities due to low demand for steel products," said Ludhiana-based Garg Furnace Managing Director Sanjeev Garg. Punjab —- a major producer of steel -- has almost 200 induction furnaces and 400 rolling mills spread across Mandi Gobindgarh, Ludhiana and Khanna.

The steel products manufactured in Punjab are mainly used by the bicycle, auto parts, hand tools, fasteners and construction industry. Units in the state produce a wide range of steel products, including TMT, MS bar, MS round, angles and channels.