India: Tier-1 mills reduce rebar list prices by up to INR 1,500/t ($18/t) m-o-m for early-Dec'24

• Inventories rise by 10-15% m-o-m
  
  
• IF tags drop amid weak demand
  
  

Indian tier 1 mills reduced list prices of rebars by up to INR 1,500/tonne (t) ($18/t) m-o-m for early-December 2024 deliveries, sources informed BigMint. Post-revision, list prices hovered at around INR 53,000-54,000/t ($626-638/t) on landed basis.

Trade-level blast furnace (BF) rebar prices edged down by INR 200/t ($2/t) w-o-w to INR 53,800/t ($636/t) exy-Mumbai, as per BigMint's assessment on 6 December 2024. Prices are exclusive of GST at 18%.

Domestic demand was lacklustre amid persistent liquidity shortfalls. Additionally, the ban on construction activities in the National Capital Region (NCR), due to poor air quality, caused delays in housing and commercial projects and kept market sentiments weak last month. These factors also led to an increase in rebar inventories by 10-15% m-o-m in early December, market sources informed BigMint.

In the project segment, prices stood at around INR 52,000-53,000/t ($615-626/t) FOR Mumbai. Demand from end-users remained weak amid liquidity issues in the market.

Update on project orders

Kalpataru Projects International (KPIL) has secured new orders worth INR 2,174 crore. The company has received order for design & construction of elevated metro rail project in India, orders in the Transmission & Distribution (T&D) business in India & overseas markets & residential building project.

Factors behind market dynamics

1. IF-rebar prices drop w-o-w: Induction furnace (IF) rebar prices fell w-o-w in major markets amid slow buying activities. Due to slow lifting of material, IF producers were forced to reduce list prices. Moreover, prevailing liquidity issues weighed on market sentiments. Inventory idling time remained high at 12-15 days. On a m-o-m basis, IF-rebar prices dropped by INR 800/t ($9/t) to INR 47,500/t ($561/t) exw-Mumbai in November as against INR 48,300/t ($571/t) in the previous month.

Trade prices were edged up by INR 100/t ($1/t) w-o-w to INR 46,700/t ($552/t) exw-Mumbai as on 6 December.

The price gap between BF-IF rebars stood at around INR 7,000-7,500/t ($83-89/t) in the Mumbai region. Notably, IF rebars command a 65-70% share of the market.

2. Raw material prices edge down w-o-w: BigMint's weekly Odisha iron ore fines Fe62% index dipped by INR 50/t ($0.6/t) w-o-w to INR 5,250/t ($62/t) ex-mines on 30 November. The Odisha iron ore market declined due to sluggish activity, limited trade, and reduced material availability.

On a m-o-m basis, iron ore fines prices rose INR 140/t ($2/t) to an average of INR 5,390/t ($64/t) in November.

Australian premium hard coking coal (PHCC) prices edged lower by $2/t w-o-w to $218/t CNF Paradip. On a m-o-m basis, prices remained stable at $219/t CNF Paradip.

3. Property registrations decline m-o-m in Nov: Property registrations in Mumbai, the country's largest real estate market, witnessed a drop of 21% to 10,200 units in November as against 12,960 units in the month-ago period, as per data released by Knight Frank India. The m-o-m dip followed a festive period-driven surge in October.

However, property registrations rose 5% y-o-y compared to 9,730 units in November 2023.

Outlook

Market participants expect buying activities to remain subdued in the coming days due to ongoing liquidity challenges. This may keep prices under pressure this month.