India: BF-rebar trade prices at 4-month low in sluggish market

• IF-rebar prices fall amid need-based buying
  
  
• Raw material prices show decline w-o-w
  
  

Trade-level blast furnace (BF) rebar prices fell by INR 800-2,000/t ($10-24/t) on a weekly basis due to sluggish demand across markets. Prices are currently hovering at a 4-month low as similar levels were last seen in end-March 2024, as per BigMint data. Market participants in the distribution network have adopted a destocking mode to liquidate their inventories. Currently, rebar prices (12-32mm, Fe500D and Fe550D) in the trade segment have declined by INR 2,000/t ($24/t) w-o-w to INR 52,300/t ($625/t) exy-Mumbai. Prices are exclusive of GST at 18%.

In the projects segment, prices are hovering in the range of INR 51,000-51,500/t ($610-616/t) FOR Mumbai basis. Buyers have adopted a wait-and-watch approach, moving to the sidelines in anticipation of further price drops in the near term. This cautious stance has subdued buying activities, negatively impacting market sentiments.

Factors weighing down prices:

1. IF-rebar prices fall w-o-w: IF-rebar trade prices fell w-o-w amid need-based buying across major markets. Buyers resisted procuring material in bulk considering the market volatility, which made sellers offer attractive discounts to liquidate material. The inventory days of IF-rebars have been hovering at 12-15 days across markets. Construction activities remained slow due to the impact of monsoons. Trade-level IF-rebar prices declined w-o-w by INR 300/t ($4/t) to INR 46,500/t ($556/t) exw-Mumbai as on 18 July 2024.

The gap between BF-IF rebars stood at INR 6,000-6,500/t ($72-78/t) in July as against INR 6,500-7,000/t ($78-84/t) in the previous month.

2. Raw material prices decline w-o-w: Prices of key steel-making raw materials - iron ore fines and coking coal - have dropped w-o-w. BigMint's weekly Odisha iron ore fines Fe62% index dropped w-o-w by INR 200/t ($2/t) to INR 4,500/t ($54/t) ex-mines as on 13 July. Prices dropped due to fluctuating pellet and sponge prices and pressure from the seaborne market.

Similarly, Australian premium hard coking coal (PHCC) prices declined on the week by $16/t to $253/t CNF Paradip as against $269/t CNF Paradip in the previous week. Prices fell due to subdued demand amid the ongoing plenum session in Beijing. In addition, offers for June/July loading cargoes were reduced, showing sellers' willingness to lower prices due to market conditions.