India: JSPL raises rebar list prices for Jan'23; other mills may follow

One of India's leading steel mills, Jindal Steel and Power Ltd. (JSPL), has announced an increase in list prices of rebar today for Jan'23 sales. Post-revision, effective prices of rebar (12-32mm, IS1786) stand at INR 59,300/t ($717/t), prices are basic excluding GST at 18%, exy-Delhi basis. Other mills are likely to announce price hike in next couple of days.

SteelMint's BF-route rebar (12-32 mm, IS1786) trade prices increased by INR 1,100/t ($13/t) w-o-w to INR 57,600/t ($696/t) exy-Mumbai, excluding GST at 18%, as on 30 December 2022.

Factors behind price hike:

1. IF-route rebar trade prices rise: Induction furnace-route (IF, 12-25mm, Fe 500) rebar trade prices have witnessed an increase of INR 2,000-2,500/t ($24-30/t) on weekly basis across various markets. For instance, trade prices were hovering around INR 54,700-55,100/t ($661-666/t) exw-Mumbai as on 29 December, an increase of INR 2,100/t ($25/t) as compared with INR 52,600-53,000/t ($636-640/t) a week ago. It is to be noted that IF rebar enjoys 65-70% of the market share.

Moderate buying enquiries and increase in spot prices of raw material prices such as sponge iron and billets have also lifted the IF-route rebar trade prices. This uptrend was also affected by decision of State Pollution Control Board (SPCB) in Odisha to shut down 22 sponge iron plants from 1st to 31st January 2023 in order to maintain air quality of Rourkela during the upcoming Men's Hockey World Cup, which is scheduled in January 2023.

2. Healthy demand from projects: Demand from projects segment has remained healthy in entire Q3FY'23. "We are getting robust order bookings from the projects segment and have booked sizeable volumes till mid of next month", sources informed SteelMint. Also, demand is likely to remain strong in the next quarter. Government infrastructure and construction projects generally pick up pace during the last quarter of the financial year as they need to stick to completion timelines.

Outlook
Mills are likely to announce hike in rebar prices for the projects segment on the back of healthy demand from the infrastructure and construction segment, which accounts for 60% of domestic steel demand.