India: Trade prices of BF-route rebar rise w-o-w as mills raise list prices

Trade-level blast furnace (BF) route rebar prices rose by INR 2,000-3,000/t ($24-36/t) w-o-w across regional markets as the tier-1 mills increased rebar list prices by INR 1,500-2,000/t ($18-24/t) earlier this week. The decision to increase prices was due to the hike in induction furnace (IF) rebar prices which led to narrowing of the BF/IF rebar price gap.

Current rebar prices in the trade segment witnessed a sharp increase of INR 2,200/t ($27/t) w-o-w to INR 54,200/t ($655/t), exy-Mumbai, as per SteelMint's assessment on 1 September, 2023. Prices exclude GST at 18%.

In the projects segment, rebar prices were heard at INR 52,500-53,000/t ($635-641/t) FOR Mumbai. Bulk project orders are still under negotiation, while spot demand is decent. Buyers are currently buying cautiously amid volatility in rebar prices.

Why prices increased?

1. IF-route rebar prices rise w-o-w: IF-route rebar prices rose by INR 1,500/t ($18/t) on w-o-w to INR 51,400/t ($621/t) exw-Mumbai. Current prices are at INR 51,600/t ($624/t) exw-Mumbai. Prices increased amid moderate demand for finished steel during the week and support from raw material prices. IF rebar makers have witnessed healthy booking volumes during the period and prices are expected to remain supported in the near term.

The monthly average gap between BF-IF rebars narrowed to INR 2,000-2,500/t ($24-30/t) in August against INR 4,000-4,500/t ($48-54/t) in the preceding month. The narrowing of this gap prompted the primary mills to hike rebar prices.

2. Raw material prices range-bound: Prices of key steel-making raw material, iron ore fines (Fe 62%) and coking coal, remained range-bound w-o-w.

SteelMint's weekly Odisha iron ore fines Fe62% index remained stable w-o-w at INR 4,400/t ($53/t) ex-mines, as on 26 August. Iron ore offers in Odisha remained supported on improved prices of raw pellets as well as steel prices in the central and eastern regions.

Australian premium hard coking coal (HCC) prices rose by $3/t w-o-w to $274/t CNF Paradip as against $271/t CNF last week. Prices increased amid higher buying interest from China.

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