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India: BF-rebar trade prices drop by INR 300/t ($4/t) w-o-w in weak market

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BigMint Bureau

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16 Feb 2024, 17:42 IST

India: BF-rebar trade prices drop by INR 300/t ($4/t) w-o-w in weak market

Trade-level prices of blast furnace (BF) rebars dropped w-o-w amid slow buying interest. Meanwhile, prices were range-bound during the week and buyers procured on urgent need basis only. Current week's rebar prices (12-32mm, Fe500D) in the trade segment dropped by INR 300/t ($4/t) w-o-w to INR 51,800/t ($624/t) exy-Mumbai. Prices are exclusive of GST at 18%.

"Inventories in the distribution network have increased and participants have been destocking considering the subdued domestic demand and market uncertainty", said a source in a statement.

In the projects segment, prices are hovering around INR 50,000-50,500/t ($602-608/t) FOR Mumbai basis, unchanged against last week's price levels. Demand remained need basis only due to subdued market sentiments.

Factors behind drop in prices:

1. IF-rebar prices range-bound: Induction Furnace (IF) rebar prices remained range-bound w-o-w amid decent trade activities during the week. Current IF-rebar prices stood at INR 48,100/t ($579/t), exw-Mumbai. Prices of sponge iron and billets also remained largely stable during the week. The monthly average price gap between BF-IF rebars stood at INR 3,500-4,000/t ($42-48/t) in February 2024 in the key market of Mumbai.

2. Infrastructure, construction demand: India's national highway construction for January 2024 showed an addition of 1,442 kms against 1,029 kms in the corresponding period last year (CPLY) and 968 kms in December 2023.

During the first ten months of April 2023-January 2024 (FY'24), the highway construction totalled at 7,658 kms as compared with 6,803 kms in the CPLY according to data released by the Ministry of Road Transport and Highways (MoRTH).

3. Raw material prices: Prices of key steel-making raw materials, iron ore fines, remained unchanged while coking coal prices dropped during the week. BigMint's weekly Odisha iron ore fines Fe62% index remained stable w-o-w at INR 5,800/t ($70/t) ex-mines. Few miners offered ore in the merchant market and no major bookings of iron ore fines were witnessed amid limited material availability.

On the other hand, Australian premium hard coking coal (PHCC) prices dropped by $10/t w-o-w to $331/t CNF Paradip as compared with $341/t CNF in the preceding week.