India: BF-rebar trade prices fall w-o-w; market awaits mills' price announcements for Aug'24

• IF-rebar prices drop amid need-based buying
  
  
• Raw material prices drop m-o-m in July
  
  

Trade-level blast furnace (BF) rebar prices declined w-o-w by INR 400-900/t ($5-11/t) amid dull buying across markets. This marked the eighth consecutive week of decline in prices. Current rebar prices (12-32mm, Fe500D and Fe550D) in the trade segment have witnessed a drop of INR 900/t ($11/t) w-o-w to INR 50,800/t ($607/t) exy-Mumbai. Prices are exclusive of GST at 18%.

In the projects segment, prices are hovering in the range of INR 49,000-50,000/t ($585-597/t) FOR Mumbai. Buying inquiries remained very limited and market activity was weak amid bid-offer disparity.

Factors driving prices down

1. IF-rebar prices drop amid need-based buying: IF-rebar trade prices fell on weekly basis due to need-based buying across markets. Buyers were cautious amid market volatility and resisted bulk purchases, leading sellers to offer attractive discounts to liquidate inventories. Mills have adjusted production in response to weak market sentiment and higher inventories. Inventory levels for IF-rebars stood at 12-15 days across markets. Trade-level IF-rebar prices dropped w-o-w by INR 400/t ($5/t) to a weekly average of INR 45,000/t ($537/t) exw-Mumbai. On monthly basis, prices have fallen by INR 3,800/t ($45/t) to an average of INR 46,700/t ($558/t) exw-Mumbai in July.

The price gap between BF-IF rebars stood at INR 5,500-6,000/t ($66-72/t) ex-Mumbai. IF-rebars enjoy 65-70% share of the market.

2.Raw material prices drop m-o-m in July: Prices of key steelmaking raw materials, iron ore and coking coal, dropped m-o-m in July. BigMint's weekly Odisha iron ore fines Fe62% index dropped INR 620/t ($7/t) m-o-m to INR 4,540/t ($54/t) ex-mines in July. Meanwhile, on weekly basis, the index edged up by INR 350/t ($4/t) to INR 4,650/t ($56/t) ex-mines last week amid a few active deals by merchant miners after the price revision post-OMC auction.

Australian premium hard coking coal (PHCC) prices declined by $12/t m-o-m to $255/t CNF Paradip in July. In addition, prices fell by $9/t on the week to $233/t against $242/t in the preceding week.

Outlook

Market participants have adopted wait-and-watch mode as mills' are likely to announce list prices for early-August 2024 dispatches in coming days.