India: Trade prices of BF-route rebars drop w-o-w on soft demand

Trade-level prices of blast furnace (BF) rebars continued to slide downwards w-o-w amid weak demand in the traders' market. Current rebar trade segment prices declined further by INR 400/t ($5/t) w-o-w to INR 51,200/t ($624/t) exy-Mumbai, as per SteelMint's assessment on 14 July 2023. Prices exclude GST at 18%. This marks the 23rd consecutive week of decline in prices.

In the projects segment, offers were heard at INR 49,000-50,000/t ($596-609/t) FOR Mumbai. Buying interest remains subdued, as buyers have been procuring on hand-to-mouth basis and heavy rains in the northern provinces have also impacted trade activities. Also, inventory pressure from mills weighs on prices.

Factors affecting prices:

1. Raw material prices fall w-o-w: Prices of key steelmaking raw material, iron ore fines (Fe 62%) and coking coal, fell w-o-w.

SteelMint's weekly Odisha iron ore fines Fe 62% index fell by INR 150/t ($2/t) w-o-w to INR 4,800/t ($58/t) ex-mines as on 8 July. Prices fell amid subdued response in recent auctions as low bids were received.

Australian premium hard coking coal (HCC) prices were down by $6/t w-o-w to $243/t CNF Paradip as against $249/t in week-ago period. Prices registered a downslide on declining buying interest.

2. IF-route rebar prices fall: Prices of Induction furnace (IF) rebars declined by INR 900/t ($11/t) w-o-w to INR 47,100/t ($574/t) exw-Mumbai on 13 July. Buying activities remained weak during the week due to heavy rainfall in the northern region which forced manufacturers to lower their offers and offer trade discounts.

The monthly average gap between BF-IF route rebar widened to INR 3,500/t ($43/t) in July as against INR 2,500-3,000/t ($30-37/t) in June.

3. Global steelmakers reduce prices: Chinese steelmaker Shagang Steel has reduced rebar prices by RMB 100/t ($14/t) for mid-July sales. Post revision, effective prices of rebar (16-25 mm) were at RMB 3,970/t ($556/t) ex-mill, including VAT.

Outlook

Prices are likely to remain under pressure in the near term as the monsoon season has approached, which may well dampen construction activities and disrupt supply chain networks.

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