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

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BigMint Bureau

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6 Sep 2024, 17:38 IST

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

Indian tier-1 mills have increased rebar list prices by INR 500-1,000/tonne (t) ($6-12/t) for early-September 2024 deliveries over the price tags of end-August, sources informed BigMint. Post revision, list prices hovered in the range of INR 50,500-51,500/t ($602-614/t) on a landed basis. Notably, mills had increased prices by up to INR 1,000/t ($12/t) at the end of August.

Following this, trade-level blast furnace (BF) rebar prices rose by INR 300/t ($4/t) w-o-w to INR 50,600/t ($603/t) exy-Mumbai, as per BigMint's assessment on 6 September 2024. Prices are exclusive of GST at 18%.

"Despite the increase in trade prices, market activity remained dull, as participants are waiting for clarity on the market's future direction," a source highlighted.

In the project segment, prices hovered at around INR 49,000-50,000/t ($584-596/t) FOR Mumbai, up by INR 1,000/t ($12/t) from the previous week's price levels. Buyers have been postponing their purchases and procuring on a need-only basis.

Factors shaping market dynamics

1. IF-rebar prices drop m-o-m: Induction furnace (IF) route rebar trade prices witnessed a drop m-o-m in August amid need-based buying. Manufacturers reduced production by 20-25% m-o-m amid rising inventories, which were in the range of 12-15 days across markets in August. Additionally, the movement of previously booked material was slow. To address this, manufacturers were compelled to reduce prices and offer discounts to clear their stock. Trade-level IF-rebar prices dropped by INR 1,400/t ($17/t) m-o-m to a monthly average of INR 45,300/t ($540/t) exw-Mumbai in August as against INR 46,700/t ($556/t) in the previous month. On a weekly basis, prices remained largely stable at INR 45,700/t ($544/t) exw-Mumbai.

The monthly average price gap between BF-IF rebars narrowed to around INR 4,500-5,000/t ($54-60/t) ex-Mumbai in August against INR 6,500-7,000/t ($77-83/t) in July. Notably, IF rebars enjoy a 65-70% share of the market.

2. Property registrations rise y-o-y: Property registrations in the country's largest real estate market, Mumbai, rose 8% y-o-y to 11,735 units in August 2024 as compared with 10,900 units in the same period last year, as per data released by Knight Frank India.

However, on a m-o-m basis, property registrations were down by 4% from 12,160 units in July 2024.

Outlook

BF rebar trade prices may remain range-bound in the near term due to slow buying during upcoming festivals this month, while the IF route rebar market may face challenges, with prices likely to experience continued downward pressure in the short term.