India: BF-route rebar trade prices fall w-o-w; market awaits mills' Nov'23 prices

Trade-level prices of blast furnace (BF) route rebars witnessed downward trend across major markets during the week due to slow domestic demand amid festive season which weighed on the market sentiments.

Current rebar prices in the trade segment declined by INR 700/t ($8/t) w-o-w to INR 56,500/t ($679/t), exy-Mumbai, as per SteelMint's assessment on 27 October, 2023. Prices exclude GST at 18%.

In the projects segment, prices are currently hovering around INR 55,000-56,000/t ($661-673/t) FOR Mumbai basis. Inquiries from end-user segment were very less this week amid limited labour availability during the festive season.

Factors behind drop in prices:

1. IF-rebar prices drop w-o-w: Weekly average prices of Induction Furnace (IF) route rebars dropped by INR 700/t ($8/t) w-o-w to INR 49,900/t ($600/t) exw-Mumbai this week. Market observed mixed response during the period, traders avoided bulk procurement in beginning of the week but there was some improvement in buying activities post-festival of Dussehra. Manufacturers offered trade discounts based on their inventory levels. Furthermore, market participants are optimistic regarding trading activities in short to medium term. Current rebar prices were assessed at INR 49,900/t ($600/t) exw-Mumbai as on 27 October 2023.

The monthly average gap between BF-IF rebars widened to over INR 6,500/t ($78/t) this month as against INR 4,500-5,000/t ($54-60/t) in September. This has been one of the prime reasons for drop in trade-level rebar prices.

2. Raw material prices range-bound: Prices of key steel-making raw materials largely remained range-bound on weekly basis. SteelMint's weekly Odisha iron ore fines Fe62% index edged upwards w-o-w by INR 100/t ($1/t) to INR 5,100/t ($61/t) ex-mines, as on 21 October. Demand for iron ore remained sluggish owing to festivals but prices inched up post-the OMC auction conducted.

Australian premium hard coking coal (PHCC) prices edged up by $2/t w-o-w to $375/t CNF Paradip as against $373/t CNF last week amid subdued demand and lower bids.

Near term outlook
Furthermore, market participants anticipate that buying activities will remain slow in near term till Diwali festival and are waiting for mills' price announcement for November dispatches, which is likely to come next week.

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