India: Majority of Secondary Steel Mills May Postpone Resuming Operations

Secondary steel players are likely to to postpone resumption of operations. SteelMint spoke to industry's leading players in secondary market based in Raipur, Punjab, Odisha, West Bengal, Hyderabad, Maharashtra, Uttar Pradesh & Karnataka.

In conversation with them it was learned that the mills are not willing to resume production immediately despite, ease in grant of permission from the central & state govt along with some conditions.

The producers have cited that, on primarily basis they have floated offers of finished steel (rebar, wire rod & structural steels) today, to clear was piled up stock before lockdown. However they haven't received any significant buying inquiries from traders & industry users.

The dispatches of previous bookings are still pending owing to logistics constraints, thus the buyers do not want to place fresh orders till there is no smooth transportation & payment procedures, they added.

Hence, they are still worried about the supply chain. Bottlenecks are lack of manpower availability post lockdown, risks involved in enforcement of safe working practices across the entire steel supply chain.

Further, most of the participants believe that few of the norms are tough to fulfill, until and unless retailers won't get permission to operate. So, material will be piled up at the trader's premise.

Also, buyer's are postponing their bookings due to inactive retail segment and end users as a large number of markets are still under orange & red zones due to which private construction works may not resume easily followed by shortage of labours.

Overall the secondary mills indicated that, till there is less relief from central govt on lockdown there is limited scope for active demand and resumption of operations by majority of secondary mills and is subject to demand pick-up.