India: Induction furnace-route wire rod trades improve

India's induction furnace (IF)-route wire rod market observed gradual growth in terms of sales this week in the major supplying markets of the central (Raipur) and the eastern (Durgapur) regions of the country.

On a weekly basis, as per SteelMint's assessment, the trade reference prices for wire rod in Raipur surged around INR 1,700/t to INR 51,000/t as against INR 49,300/t exw. Similarly, in the Durgapur market, it surged around INR 1,600/t to INR 50,800 against INR 49,300/t exw in the previous week.

The market remained volatile as prices kept fluctuating during the initial days of the week. However, after buyers started procuring the material in bulk, it provided an edge to suppliers as they started hiking their initial offer prices again since they had necessary orders.

Factors behind rise in prices

Active buying enquiries: The wire rod market has observed an active trading session as deals for around 17,000 t were recorded in Raipur market by SteelMint during the week. Due to an increase in demand from binding wire-manufacturers which use wire rod as raw material, buying remained active in the spot market. Along with active bookings, smooth lifting of materials was prominent as reported by mill officials.

Rise in input cost: The input cost of primary raw material for wire rod like sponge iron and steel billet prices saw a slight uptick on a weekly basis, which led to a similar trend in the finished steel segment as well. At present, sponge iron prices (PDRI, Lumps, FeM 80%, +/-1) stand at INR 31,900/t (exw- Raipur), up by INR 500/t w-o-w. Meanwhile, billet prices (100x100mm, IS 2831) stand at INR 46,750/t (exw), up by INR 1,600/t w-o-w, as per SteelMint's Billet Index Raipur.

Adjusted production: It has been observed that wire rod productions have been adjusted in both the markets which has also led to the strengthening of the prices. In the Raipur market, some suppliers currently have either halted or adjusted production and have shifted to other commodities in which they get better margins compared to wire rods.

Outlook: Buying enquiries are likely to remain active in the wire rod steel segment in the coming days. However, prices might remain volatile, depending on the price movement in the raw materials.