India: BF-rebar trade prices remain range-bound w-o-w amid slow demand
...
Trade-level blast furnace (BF) rebar prices remained mostly range-bound this week, barring some markets where they witnessed a marginal rise. Domestic demand remained dull, weighing on market sentiments.
A source highlighted that supplies from a state-owned steel producer have been hit, as the plant is currently operating with just one BF. Moreover, the production of hot metal has been slowing due to a shortage of funds and key raw materials such as coking coal. This has resulted in limited supplies, particularly in south India, leading to a slight increase in prices across some markets.
As per BigMint's assessment on 13 September 2024, rebar prices were stable w-o-w at INR 50,600/tonne (t) ($603/t) exy-Mumbai. Prices are exclusive of GST at 18%.
In the project segment, prices hovered at around INR 49,000-50,000/t ($584-596/t) FOR Mumbai. Buying interest was limited amid need-based procurement.
Factors driving current market dynamics
1. IF-rebar prices stay range-bound w-o-w: Induction furnace (IF) route rebar trade prices remained range-bound this week amid subdued buying activities. Manufacturers kept their list prices stable while occasionally offering discounts depending on the market scenario. Mills have adjusted their production by around 20-25% amid rising inventories, which were in the range of 12-15 days across markets. On a weekly basis, prices remained largely stable at INR 45,600/t ($543/t) exw-Mumbai.
The price gap between BF-IF rebars stood at around INR 4,500-5,000/t ($54-60/t) in the Mumbai market. Notably, IF rebars enjoy a 65-70% share of the market.
2. Raw material prices show mixed trends: Prices of key steelmaking raw materials, iron ore and coking coal, exhibited contrasting trends w-o-w. Prices of iron ore inched up, while those of coal witnessed a drop.
BigMint's weekly Odisha iron ore fines Fe62% index edged up by INR 100/t ($1/t) w-o-w to INR 4,200/t ($50/t) ex-mines as on 7 September 2024. Some miners raised iron ore offers, with good sales recorded at the new price levels. Private miners closed deals, although some refrained from offering material in the merchant market because of pending deliveries of older bookings.
Australian premium hard coking coal (PHCC) prices declined by $13/t w-o-w to $197/t CNF Paradip.
Outlook
Trade-level prices of BF and IF rebars may remain range-bound in the near term owing to slow buying during the upcoming festive season this month.
