India: Primary steel mills increase rebar list prices by up to INR 1,000/t ($12/t) for mid-Dec'22

Indian primary steel mills have announced an increase of up to INR 1,000/t ($12/t) in rebar list prices a few days ago, SteelMint learnt from reliable sources. Mill-wise effective prices are as below:

• Steel Authority of India Limited (SAIL): INR 56,500/t ($681/t) ex-Mumbai
  
  
• JSW Steel: INR 56,500/t ($681/t) ex-Mumbai
  
  
• Jindal Steel and Power Limited (JSPL): INR 57,300/t ($692/t) ex-Delhi
  
  
• The prices are exclusive of 18% GST.
  
  

SteelMint's BF-route rebar trade prices were assessed at INR 56,500/t ($682/t) exy-Mumbai, excluding GST at 18%, as on 16 December 2022.

Factors lending support to price hike by mills:

1. Raw material prices up: Prices of steelmaking raw materials such as iron ore have registered an increase since last week of November, which has supported the rebar prices. SteelMint's Odisha iron ore fines index (Fe 62%) was assessed at INR 4,350/t ($53/t) as on 10 December 2022, touching six month high-levels, SteelMint data shows. During mid-November, price levels were seen around range of INR 3,400-3,500/t ($41-42/t).

Coking coal (Australian premium HCC) prices have remained range bound at $260-270/t CNF Paradip since the beginning of December.

2. IF-route rebar prices remain rangebound: The induction furnace (IF) route rebar trade prices have remained rangebound since the first week of December. Trade level prices of IF-route rebars have continued to maintain levels of INR 52,800-53,300/t ($637-644/t) exw-Mumbai, since the starting of December. This is lending support to BF route trade prices. It is to be noted that IF rebar enjoys 65-70% of the market share.

3. Healthy demand from project segment: The demand from project segment has remained strong throughout Q3FY'23. Trade participants suggest that the demand has seen a spike in Delhi-NCR region specially after the revoke in ban on construction and demolition activities, which happened in the first week of December.

It is to be noted that primary mills have increased rebar contract prices for mid-December sales by upto INR 1,000/t ($12/t). For instance, it is heard that JSPL effective offer for project buyers stands at around INR 55,500-56,000/t ($670-676/t) FOR Delhi.

Outlook
Prices are likely to remain supported in the near term with revival in demand as construction activities are likely to gather pace. Raw material costs are increasing once again and energy prices are expected to be very high at least until March 2023 in the global market, which is likely to keep rebar prices supported in the near term.