India: Trade-level BF-rebar prices remain range-bound amid weak market sentiments

• Material shortages keep BF-rebar prices supported
  
  
• Project segment prices rise amid Diwali restocking
  
  

Trade-level blast furnace (BF) rebar prices remained range-bound w-o-w across major markets. In the trade segment, slow buying interest weighed on sentiments. Meanwhile, shortages in material of some sizes due to maintenance shutdowns at mills and lower inventories kept trade prices supported this month. It should be noted that mills increased rebar prices for three consecutive weeks in October. In fact, prices were raised by INR 500-1,000/t ($6-12/t) last week.

Trade-level blast furnace (BF) rebar prices remained stable w-o-w at INR 54,500/t ($648/t) exy-Mumbai, as per BigMint's assessment on 25 October 2024. Prices are exclusive of GST at 18%.

In the project segment, prices witnessed an uptick w-o-w, hovering at around INR 53,500-54,500/t ($636-648/t) FOR Mumbai. In recent days, there has been a rise in buying interest, resulting in some inquiries. Ahead of the Diwali festive week, project segment buyers have begun to stock up, while mills are focused on fulfilling existing pending orders.

Factors behind market dynamics

1. IF-rebar prices decline amid weak demand: Induction furnace (IF) rebar prices cooled w-o-w across markets amid weak buying activity, prompting buyers to purchase material on need-basis only. Manufacturers reduced list prices by up to INR 1,000/t ($12/t) this week and offered discounts to liquidate material. This resulted in idling time of inventories rising to 10-12 days from 7-10 days a week ago. Prices of billets and sponge iron also witnessed a w-o-w fall.

IF-rebar trade prices dropped by INR 800/t ($10/t) w-o-w to INR 47,200/t ($561/t) exw-Mumbai.

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

2. Raw material prices exhibit mixed trends: BigMint's weekly Odisha iron ore fines Fe62% index rose by INR 600/t ($7/t) w-o-w to INR 5,600/t ($67/t) ex-mines on 19 October 2024.

India's largest merchant iron ore mining company, National Mineral Development Corporation (NMDC), raised list prices of calibrated lump ore (CLO) and fines, with effect from 23 October, by INR 700/t ($8/t) and INR 400/t ($5/t), respectively.

The miner fixed prices of DR CLO (10-40 mm, Fe67%) at INR 7,420/t ($88/t) and iron ore fines (-10 mm, Fe64%) at INR 5,410/t ($64/t) on FOR basis from its Bacheli complex. Prices include royalty, DMF, and NMET charges. This was the second time the miner increased prices in October 2024. The hike in offers was due to rising global iron ore prices, climbing domestic pellet prices, and higher bids at the auction from the Odisha Mining Corporation (OMC).

Conversely, Australian premium hard coking coal (PHCC) prices dropped by $8/t w-o-w at $216/t CNF Paradip.

Outlook

Market participants expect rebar trade prices to remain supported next month amid maintenance shutdown plans by a leading steel mill, which may lead to a hike in offers.