India: Tier 1 mills hike rebar prices for Sep'23, trade level prices rise w-o-w

Trade level prices of blast furnace (BF) route rebars increased w-o-w across major markets this week as tier-1 mills hiked rebar list prices by up to INR 2,500/t ($30/t) to INR 56,000-57,000/t ($673-685/t) on landed basis for early-September dispatches.

Current rebar prices in the trade segment witnessed a sharp increase of INR 2,300/t ($28/t) w-o-w to INR 56,500/t ($679/t), exy-Mumbai, as per SteelMint's assessment on 8 September, 2023. Prices exclude GST at 18%.

Factors behind price hike:

1. Prices in projects segment rise: Prices in the projects segment are currently hovering around INR 54,000-55,000/t ($651-663/t) FOR Mumbai basis against INR 52,500-53,000/t ($631-637/t) in the previous week, excluding GST at 18%. Inquiries for projects orders were less this week, meanwhile conclusions happened due to hike in prices.

2. IF-route rebar prices up w-o-w: Booking volumes for induction furnace (IF) route rebars were lower at higher prices during the week. However, manufacturers hold their prices owing to adequate booking orders previously. IF rebar prices rose by INR 500/t ($6/t) w-o-w to INR 52,000/t ($627/t) exw-Mumbai. Current IF-route rebar trade prices were assessed at INR 52,200/t ($629/t), exw-Mumbai. It should be noted that IF-route rebars enjoy 65-70% of the market share.

The monthly average gap between BF-IF rebars widened to INR 3,500-4,000/t ($42-48/t) this month against INR 2,000-2,500/t ($24-30/t) in August. The gap between the two increased with rise in BF-rebars prices due to price hike by tier-1 mills. M-o-m, average IF-rebar prices rose by around INR 2,000/t ($24/t) to INR 48,900/t ($589/t) exw-Mumbai in August, while BF-rebars prices remained largely flat m-o-m at INR 51,100/t ($615/t) exy-Mumbai but started to rise this month, which led to widen the gap between the two.

3. Property registrations rise in August: Property registrations in the country's largest real estate market, Mumbai rose by 3% m-o-m to 10,550 units in August as against 10,200 units in the previous month. This marks the highest sales recorded in last 10 years in the month of August. Y-o-y, registrations increased 23% as compared with 8,552 units in the same period last year, as per data released by Knight Frank India.

Outlook
Mills are currently having limited inventories at their yards due to maintenance shutdowns taken last month owing to slow domestic demand in rainy season. Furthermore, BF-rebar production is likely to remain impacted this month too as leading private steel mills have suspended production due to issues at their facilities, which will keep inventories at lower and further lend support to prices.

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