India: BF-rebar trade prices drop by INR 600/t ($7/t) w-o-w in subdued market

• IF-rebar prices fall to a 3.5-year low
  
  
• India records 646 km of NH construction in June
  
  

Trade-level blast furnace (BF) rebar prices fell by INR 600-1,400/t ($7-17/t) w-o-w amid subdued buying across markets. Buyers are currently away from market amid price volatility and weak sentiments. Market participants in distribution channel continued to destock inventories as prices fallen continuously from past couple of weeks. Current week's rebar prices (12-32mm, Fe500D and Fe550D) in the trade segment witnessed a drop of INR 600/t ($7/t) w-o-w to INR 51,700/t ($618/t) exy-Mumbai. Prices are exclusive of GST at 18%.

In the projects segment, prices are hovering in the range of INR 50,000-50,500/t ($597-603/t) FOR Mumbai basis, down by INR 1,000/t ($12/t) against preceding week's levels amid limited buying inquiries from end-users.

Factors behind decline in prices:

1. IF-rebar prices at 3.5-year low: IF-rebar trade prices are currently hovering at nearly 3.5-year low levels as similar levels were last seen in February 2021, as per BigMint data. On weekly basis, prices dropped due to need-based buying across markets. Buyers resisted bulk purchases amid market volatility, prompting sellers to offer attractive discounts to liquidate inventories. Slow lifting for previously booked material across markets weighed on the sentiments. Inventory levels for IF-rebars remained at 12-15 days across markets. Trade-level IF-rebar prices declined w-o-w by INR 1,600/t ($19/t) to INR 44,900/t ($536/t) exw-Mumbai as on 26 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. Infrastructure, construction demand: India's national highway construction for June 2024 showed an addition of 646 km against 785 km in the corresponding period of last year (CPLY).

India's national highway construction for the April-June 2024 (Q1FY'25) was recorded at 1,934 km against 2,250 km in the CPLY.

Outlook

Prices of BF-rebars are expected to continue their downtrend in the near term as participants may stay away from the market, awaiting mills' list prices for next month's dispatches. In contrast, IF-rebar prices have bottomed out and may remain range-bound or see a slight uptick in the coming days.