Witnessing current TMT market and upcoming capacities in different parts of India, Steel 360 took a TMT outlook in North India. We interviewed Mr. Mohit Gupta, a well known trader based in Delhi to share his thoughts. And, this is what what he has to say.
TMT market in North looks cold. So far there are no new plants or additional capacities which are coming up in the Northern region. The demand is matching supply with the industry operating at around 60-70% capacity. Quite a few plants in UP have either halt or shut production owing to costly raw material and poor demand. The manufacturers in the region largely use imported scrap which has gone costlier because of weak rupee. Production cost dynamics have accordingly gone haywire for large set of manufacturers.
On the other hand, demand is pale & poor. No new government projects have come up recently and owing to costly land, private projects are slow & few. The real estate industry is with difficulties able to finish projects but not able to sell much. Banks are not offering new loans considering the fact that the new government may change policies soon after assuming power.
Financially speaking, the current government doesn’t seem to have much strength. Even if a new party takes charge at the centre, it will take time to build financial strength over the next year. New project flow may start thereafter.
Usually in Northern region, more than 50% of TMT is sold through dealer network owing to the presence of large brands and the rest goes into projects. We, as a dealer keep many different brands on offer; with different price points, each brand has its own niche and accordingly converting clients on price points becomes easier.