India: BF-rebar trade prices drop by INR 300/t ($4/t) w-o-w amid weak demand
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Trade-level blast furnace (BF) rebar prices remained range-bound across markets this week. Trade prices have witnessed drop across some markets, while remained stable at others. Buying interest at current price levels remained weak and there were limited inventories in the trade channel due to maintenance shutdown taken by major tier-1 mills during April-May period.
Current rebar prices (12-32mm, Fe500D) in the trade segment have dropped by INR 300/t ($4/t) w-o-w on the week to INR 58,400/t ($702/t) exy-Mumbai. Prices are exclusive of GST at 18%.
In the projects segment, prices are hovering around INR 57,500-58,000/t ($691-697/t) landed Mumbai basis.
Factors behind market dynamics:
1. PSU Steelmaker resumes operation: A PSU steelmaker has started operations as the supply of coking coal from Adani Gangavaram has resumed last week, BigMint learnt from market sources. Furthermore, the issues related to non-availability of material in channel will take some more time to resolve and this may also cool down the prices to optimum levels in the markets affected due to halt in operations of the steelmaker. In addition, other major mills are expected to resume operations from next month, which will improve supplies into the market.
2. IF-rebar prices range-bound amid weak demand: Induction Furnace (IF) route rebar trade prices remained range-bound w-o-w at average of INR 53,200/t ($639/t) exw-Mumbai this week. Demand was weak as uncertainty about market direction has kept buyers away to procure material at current price levels. Prices of billets and sponge iron were on higher side amid tightness which kept manufacturers of finished steel to keep their offers stable. Meanwhile, marginal trade discounts were offered to liquidate inventories. It must be noted that the IF-based mills have a 65-70% share in the rebar market.
The gap between BF-IF rebars widened to around INR 5,000-5,500/t ($60-66/t) in May as compared with INR 4,000-4,500/t ($48-54/t) in preceding month.
Outlook
Rebar prices in the IF-segment may remain range-bound with little fluctuations, while BF-segment might see price drop as supplies will improve in coming days.
