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India: BF-rebar trade prices drop w-o-w; market awaits mills' prices for Jun'24

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BigMint Bureau

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31 May 2024, 17:41 IST

India: BF-rebar trade prices drop w-o-w; market awaits mills' prices for Jun'24

Trade-level blast furnace (BF) rebar prices witnessed a drop w-o-w due to weak buying interest in the trade channel. Market Participants adopted a wait-and-watch strategy awaiting mills' price announcement for June 2024 sales. Also, the general elections are about to get over in next few days.

Current rebar prices (12-32mm, Fe500D & Fe550D) in the trade segment have dropped by INR 400/t ($5/t) w-o-w on the week to INR 58,000/t ($695/t) exy-Mumbai. Prices are exclusive of GST at 18%.

In the projects segment, prices are hovering around INR 57,000-57,500/t ($683-689/t) landed Mumbai basis.

Factors behind market dynamics:

1. Slow demand, shortages in domestic market: Demand for BF-rebars remained weak during the month coupled with shortages in sizes of material which led to hike in prices. Meanwhile, marginal price correction was observed over the past few days owing to limited buying, easing issues of material availability in the market. The operations at a PSU steel major have started few days back and dispatches are likely to resume fully by early-June and other private mills will also resume full operations, BigMint learnt from market sources. Furthermore, this will improve supplies into the domestic market and balance the supply-demand dynamics.

2. IF-rebar prices drop amid weak demand: Induction Furnace (IF) route rebar trade prices witnessed a drop of INR 500/t ($6/t) w-o-w to average of INR 52,600/t ($630/t) exw-Mumbai this week. Buying activities were good in the beginning of the month. Meanwhile, buyers did not procure in bulk volumes in the later part of month and manufacturers offered trade discounts to liquidate inventories. Trade prices of rebars rose m-o-m in May owing to higher prices of raw materials and semi-finish steel. The inventory days increased to around 8-10 days in May.

The gap between BF-IF rebars widened to around INR 5,000-5,500/t ($60-66/t) in May as compared to INR 4,000-4,500/t ($48-54/t) in the preceding month.

Outlook

Market participants anticipate that prices might fall in coming days as supplies will improve from tier-1 mills. While pre-monsoon restocking is anticipated to start post-general elections 2024.