India: BF-route rebar trade prices drop INR 500/t w-o-w amid sluggish demand

Trade level prices of blast furnace-(BF) route rebars slid down across major markets amid sluggish domestic demand. Current rebar prices in the trade segment dropped by INR 500/t ($6/t) w-o-w to INR 50,500/t ($614/t), exy-Mumbai, as per SteelMint's assessment on 28 July, 2023. Prices exclude GST at 18%. This has been the 25th consecutive week of drop in trade prices, as per SteelMint records.

Factors weighing on prices-

1. Raw material prices fall: Prices of key steelmaking raw material, iron ore fines (Fe 62%), fell compared to last week. SteelMint's weekly Odisha iron ore fines Fe 62% index fell by INR 500/t ($6/t) w-o-w to INR 4,200/t ($51/t) ex-mines as on 22 July. Buyers actively participated in the Odisha Mining Corporation's (OMC's) latest auction due to lower inventories and reduced base prices.

2. IF-route rebar prices drop: Induction furnace-(IF) route rebar trade prices registered a drop of INR 300/t ($4/t) w-o-w to INR 46,000/t ($560/t), exw-Mumbai as on 28 July. Demand in the spot market remained weak amid the monsoon and buyers procured on urgent requirement basis only.

The monthly average spread between BF-IF rebars has widened to around INR 4,000/t ($49/t) in July as against INR 2,500-3,000/t ($30-36/t) seen in the preceding month.

3. Subdued demand from projects: Rebar offers in the projects segment are hovering around INR 47,000-48,000/t ($572-584/t) FOR Mumbai. However, orders are not being placed at the current price levels as bookings have been kept on hold and market participants are awaiting for mills' price announcements for early-August dispatches.

Furthermore, the gap between trade level prices and that of project sales prices has now increased to INR 2,000-3,000/t ($24-36/t) as against INR 1,000/t ($12/t) across markets as mills have been giving discounts owing to subdued sales in the rainy season.