Steel industry has always been at the forefront of industrial development. This industry forms the backbone of any economy and important industries that include shipbuilding, railway locomotive, and construction as well as heavy and light machinery depend heavily on the availability of a country’s iron and steel resources. Manufacturing of steel and TMT steel bars is regarded as a major industry and the global TMT steel bar market is anticipated to expand at a Compound Annual Growth Rate of more than 8 percent until 2023. Major factors driving the growth of this industry include the rapid growth of the global construction industry and the infrastructural development across the globe.
India is not only a developing nation but also one of the major economies of the world, where the Iron and Steel industry plays a significant role. India stood as the world’s second-largest steel producer with a production capacity of 111.2 million tons (MT) in the year 2019.
The most preferred material
TMT bars are used largely for different construction projects since these are high-strength reinforcement bars that have a tough outer core and a soft inner core.
TMT bars are manufactured using high-strength steel and these bars possess several qualities, which make them the most preferred material for numerous types of construction projects.
One of the distinct advantages of TMT bars is that it has properties such as great ductility and bendability and due to this one can create pre-welded meshes, this eliminates the need of manual binding. And, this facilitates in bringing down both the construction time and fabrication time.
With its unique metallurgical process which combines work hardening with heat-treatment to produce robust and high strength bars using low-carbon steel, TMT bars have a great demand. However, technical constraints regarding higher grade TMT bars hinder the growth of the TMT steel bar market.
The rise in prices of steel products that are used in the construction sector has an adverse impact on real estate companies. This is because these entities are now not in a position to pass the additional cost on their buyers. Not just that, they may also witness shirking of margin by 4-6 percent, realtors said.
Also, the price of construction steel/TMT bars had recently touched Rs 45000 per ton in some markets. This was at least 30-40 percent higher than the rate in the pre-COVID times.
“The steel price rise is hurting the real-estate companies as the property prices are under pressure. The additional cost will result in a shrink of gross margin by 5-6 percent,” Bengal Peerless Housing Development Company CEO Ketan Sengupta told.
Real estate industry body CREDAI Bengal President Nandu Belani said the spurt in steel prices will reduce the margin by 4-5 percent, which is quite high for the sector. Presently, only the residential sector has seen a revival of demand, while the commercial and industrial segment is still reeling under pressure, and the high cost will discourage builders to delay the launch of new projects, the officials said.
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