India: BF-rebar trade prices fall to 5-month low on subdued demand

Blast furnace (BF) route rebar prices at the trade level witnessed a w-o-w decline due to subdued domestic demand, reaching a 5-month low. Current trade prices are at levels last observed in August 2023, marking the 15th consecutive week of price reduction. Buyers have adopted a need-based purchasing approach amid the continuous fall in prices. As of SteelMint's assessment on 19 January, 2024, rebar prices (12-32mm, Fe500D) in the trade segment have decreased by INR 500/t ($6/t) w-o-w, reaching INR 51,500/t ($620/t) exy-Mumbai. Prices are exclusive of GST at 18%.

In the projects segment, prices are presently in the range of INR 50,000-50,500/t ($602-608/t) on a free on rail (FOR) Mumbai basis.

Factors behind drop in prices:

1. Slow demand in IF-rebar segment: Induction furnace (IF) rebar trade prices remained unchanged at INR 48,600/t ($585/t) on a weekly basis, attributed to sluggish trade activities prompting manufacturers to offer discounts. Demand was driven by a need-basis approach, reflecting a lack of confidence from buyers. As of 19 January, 2024, trade-level IF-rebar prices were at INR 48,700/t ($586/t) ex-works Mumbai.

The monthly average price gap between BF-IF rebars stood at INR 3,000-3,500/t ($36-42/t) in the key market of Mumbai.

2. Raw material prices: Key steel-making raw material prices, specifically iron ore, remained stable w-o-w, while coking coal prices increased compared to the previous week. SteelMint's weekly Odisha iron ore fines Fe62% index remained unchanged at INR 5,500/t ($66/t) ex-mines. The market exhibited a muted performance last week, with no significant trading activity observed. Market participants remained on the sidelines, exercising caution in material bookings, given the drop in offers in the pellet and sponge iron markets.

Australian premium hard coking coal (PHCC) prices rose by $8/t w-o-w to $352/t CNF Paradip as compared with $344/t CNF in the preceding week.