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India: BF rebar prices fall to nearly 4-month low on soft demand

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BigMint Bureau

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21 Apr 2023, 17:37 IST

India: BF rebar prices fall to nearly 4-month low on soft demand

Trade-level BF-route rebar prices continued to remain under pressure amid dull buying interest in the distribution channel. Prices are currently at a 3.5-month low, with similar levels last seen in the beginning of January.

Current rebar trade segment prices were at INR 59,400/t ($723/t), down INR 300/t w-o-w exy-Mumbai, as per SteelMint's assessment on 21 April. Prices are excluding GST at 18%.

Why are prices under pressure?

1. Dull buying interest weighs on prices: Buying interest for BF-route rebars remained dull due to slowdown in the pace of construction activities with the beginning of this financial year coupled with higher interest rates and delay in credit collection from buyers. As a result, trade prices have been on a free fall over the last couple of weeks. "Currently, we are very cautious in lifting new inventories from mills considering sluggish demand in the market,"said a North India-based distributor.

In addition, buying from the projects segment too remained low as they are currently coming up on requirement only. Current offers in the segment are hovering around INR 58,500-59,500/t ($712-725/t) FOR Mumbai.

2. IF-route rebar prices range-bound: IF-route rebar trade prices stood at INR 55,000/t ($669/t), exw-Mumbai as on 20 April 2023. Prices have been range-bound on average buying interest and edged up by INR 200/t ($2/t) to average of INR 54,900/t ($668/t), exw-Mumbai w-o-w. IF route rebar enjoys a domestic market share of around 65-70%, as per SteelMint's assessment.

The price gap between BF-IF route rebars has reduced to INR 4,500-5,000/t ($55-61/t) against INR 5,000-5,500/t ($61-67/t) last month.

3. Infrastructure and construction demand: Demand from infrastructure and construction segment remained firm during the last month of FY23.

There have been significant additions of 2,929 kms in the domestic national highway network in March 2023 totaling to 10,993 kms of construction in FY23, falling by 13.7% from the government's target of 12,500 km, according to data released by Ministry of Road Transport and Highways (MoRTH).