India: BF rebar trade prices drop INR 500/t ($6/t) w-o-w on sluggish demand

Trade-level blast furnace (BF) rebar prices declined on the week across markets owing to sluggish domestic demand. Current rebar prices (12-32mm, Fe500D and Fe550D) in the trade segment have dropped INR 500/t ($6/t) w-o-w to INR 57,300/t ($686/t) exy-Mumbai. Prices are exclusive of GST at 18%.

In the projects segment, prices are hovering around INR 56,000-57,000/t ($670-682/t) landed Mumbai basis. Buyers remained on the sidelines amid decline in prices and were cautious in making purchases which kept demand largely need-based.

Factors pushing prices lower

1. IF rebar prices fall w-o-w: Induction Furnace (IF) rebar trade prices have continued to show a downtrend since the last three weeks. Prices have dropped up to INR 2,000/t ($24/t) across markets. Demand in the IF-rebar segment remained subdued and mills offered trade discounts to liquidate inventories. The inventory days of IF-rebars have increased to 12-15 days. Furthermore, mills might opt for production cuts if the current scenario continues. Also, prices of sponge iron and billets have fallen amid weak demand. Trade-level IF-rebar prices have declined by INR 1,600/t ($19/t) to INR 49,100/t ($588/t) exw-Mumbai as on 21 June 2024.

The gap between BF-IF rebars widened further this month to INR 6,500/t ($78/t) compared with INR 5,000-5,500/t ($60-66/t) in the preceding month.

2. Infrastructure, construction demand: India's national highway construction for May showed an addition of 805 km against 942 km in the corresponding period of last year (CPLY).

India's national highway construction for the April-May 2024 period was recorded at 1,288 km against 1,465 km in CPLY.