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India: Primary steel mills raise rebar prices by up to INR 1,000/t ($12/t) for early-Nov'24

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BigMint Bureau

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6 Nov 2024, 19:45 IST

India: Primary steel mills raise rebar prices by up to INR 1,000/t ($12/t) for early-Nov'24

Inventories decline 15-20% m-o-m

Property registrations rise in key market

Indian primary mills have raised rebar list prices by up to INR 1,000/tonne (t) ($12/t) for early-November 2024 deliveries, sources informed BigMint. Post revision, list prices are hovering in the range of INR 54,500-55,500/t ($646-658/t) on landed basis. It should be noted that mills had announced interim price hikes in the previous month.

In the project segment, buying activities picked up ahead of the festive week, as buyers started to restock resulting in some inquiries and mills have been fulfilling pending orders. Prices were hovering around INR 54,000-55,000/t ($640-652/t) FOR Mumbai.

Factors behind price hike

1. Inventories decline m-o-m: Rebar inventories with primary mills declined 15-20% on the month to around 2-2.25 lakh t in early-November. Notably, RINL was operating with only one blast furnace (BF) over the last two months, which led to limited supply of material to the market. Meanwhile, the second blast furnace has started operations this month, sources informed. In addition, the maintenance shutdowns at plants of a leading PSU steelmaker are likely to keep supplies tight this month. Furthermore, this led to shortages for certain sizes last month, lending support to prices.

2. IF-rebar prices show downtrend: Induction furnace (IF) rebar prices showed a downward trend in October amid weak buying activity, prompting buyers to purchase material on need-basis only. Manufacturers offered attractive discounts to liquidate their material; meanwhile, buyers were cautious and opted a wait-and-watch mode. Market sentiment was weighed down by bid-offer disparities, with inventories lasting around 7-10 days. IF-rebar trade prices were largely range-bound w-o-w at INR 47,300/t ($561/t) exw-Mumbai.

The price gap between BF-IF rebars increased m-o-m to INR 7,000-7,500/t ($83-89/t) in the Mumbai market. Notably, IF rebars have a 65-70% share of the market.

3. Property registrations rise m-o-m: Property registrations in Mumbai, the country's largest real estate market, registered an increase of 42% m-o-m to 12,960 units in October as against 9,100 units in month ago, as per data released by Knight Frank India.

On an annualised basis, property registrations increased 22% compared with 10,600 units in October 2023.

Outlook

Market participants anticipate that BF rebar prices may remain supported in the coming days amid lower inventories. In addition, construction activities are expected to gain momentum as workers return to their sites after the festive holidays.