India: Trade-level BF-rebar prices drop by INR 500/t ($6/t) w-o-w on slow demand

Trade-level prices of blast furnace (BF) route rebars witnessed downward trend across major markets amid slow buying interest during the week. Current rebar (12-32mm, Fe500D) prices in the trade segment dropped by INR 500/t ($6/t) w-o-w to INR 53,300/t ($641/t), exy-Mumbai, as per SteelMint's assessment on 22 December 2023. Prices are excluding GST at 18%.

In the projects segment, prices are currently hovering at INR 51,500-52,000/t ($619-625/t) on FOR Mumbai basis. Demand from end users was on need-basis only amid declining prices as they have postponed their purchase decision waiting for stability in prices.

Factors behind drop in prices:

1. Fall in IF-rebar prices: Trade prices of induction furnace (IF) route rebars stood at INR 48,500/t ($583/t) exw-Mumbai as on 22 December 2023. Trade activities remained sluggish in the spot market amid need-based buying. On weekly basis, prices registered a drop of INR 600/t ($7/t) to an average of INR 48,700/t ($586/t) exw-Mumbai against INR 49,300/t ($593/t) seen last week.

2. Slow demand from infra and construction: Demand from the infrastructure and construction segment slowed down last month with 774 km in addition to the domestic national highway network in the month of November 2023 as against 907 kms in the previous month.

During the first eight months of FY'24 (April-November 2023), the highway construction totalled at 5,248 kms, up 10% as compared with 4,766 kms in the corresponding period last year (CPLY) according to data released by the Ministry of Road Transport and Highways (MoRTH).

3. Raw material prices range-bound: Prices of key steel-making raw materials remained largely range-bound during the week. SteelMint's weekly Odisha iron ore fines Fe62% index edged upwards by INR 100/t ($1/t) w-o-w to INR 5,100/t ($61/t) ex-mines as against INR 5,000/t ($60/t) in the week-ago period. Active raw pellet and low-grade fines export booking and high-grade material shortages in the market have pushed the iron ore prices upwards.

On the other hand, Australian premium hard coking coal (PHCC) prices dropped by $1/t w-o-w to $350/t CNF Paradip as compared with $351/t CNF in the preceding week due to low buying interest.

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