India: Trade-level BF-route rebar prices range-bound on limited buying interest

Trade-level prices of blast furnace (BF)-route rebars remained range-bound w-o-w in the key market of Mumbai amid limited buying interest in the trade channel. Current rebar trade segment prices were at INR 59,700/t ($731/t) exy-Mumbai, as per SteelMint's assessment on 14 April 2023. Prices exclude GST at 18%.

Factors keeping prices range-bound:

1. IF route rebar prices stable: IF-route rebar trade prices remained largely flat at INR 54,600/t ($668/t) exw-Mumbai from the begining of the week amid improved bookings against last week. Meanwhile, prices have registered a fall of INR 800/t ($10/t) w-o-w against the weekly average price of INR 55,500/t ($679/t) seen in the preceding week. IF route rebar enjoys a domestic market share of around 65-70%, as per SteelMint's assessment.

With this the price gap between BF-IF route rebars has reduced to INR 4,500-5,000/t ($55-61/t) against INR 5,000-5,500/t ($61-67/t) last month.

2. Subdued demand from infra and construction: Property registrations in the country's largest real estate market, Mumbai, fell by 26% on the year to 12,421 units in March 2023 as against 16,726 units seen in the same period last year, as per data released by Knight Frank India.

Meanwhile, demand from projects segment remained lacklusture and need-based amid decent inventory levels held by end-users. Current offers in the projects segment are hovering around INR 59,000-59,500/t ($723-729/t) FOR Mumbai, sources informed.

3. Global sentiments remain bearish: The sentiments in the global longs market remained bearish amid challenges like supply-demand imbalance, higher interest rates and squeezed credit lines. This has left domestic European mills struggling for orders.

In addition, leading Chinese steelmaker, Shagang Steel has lowered rebar prices by RMB 100/t ($15/t) for mid-April 2023 sales. Post reduction, effective rebar prices (16-25 mm) were at RMB 4,350/t ($636/t), ex-mill including VAT.

Furthermore, the outlook for the global longs market is unsatisfactory due to the current prevailing challenges.