India: Wire Rod Prices Plunge Amid Selling Pressure

Secondary Wire rod mills seem to remain under pressure over poor lifting and limited fresh bookings resulting in mounting of inventories with them, SteelMint learned in conversation from the mid sized plants.

Notably, there has been significant drop in wire rod prices since the beginning of month, even Raipur - central India based plants were reducing prices day-by-day by INR 300/MT since start of week and today they cuts in huge by INR 500/MT to INR 34,900/MT ex-plant. The prices are excluding trade discount & size 5.5mm.

Yesterday (20th Jun'19), the trade discount of the plants in Raipur was learned at INR 1,300-1,500 MT, however by re-sellers (stockiest) end it was close to INR 1,800-2,000 MT. Thus trade reference prices for Wire rod in Raipur stood at close to INR 33,300-33,500/MT ex-plant.

Similarly in Durgapur - eastern India, prices are falling continuously due to trade competition among producers to fetch healthy bookings. The trade reference prices in Durgapur is hovering at INR 33,300-34,000/MT ex-plant, which were last seen during Dec'17.

The conversion spread from Billet & Wire rod dropped in Durgapur due to rising inventories. As per data maintained by SteelMint, the current spread is at INR 4,500-5,000/MT, which was during Apr-May'19 more than of INR 5,000/MT.

As per industry sources, the prevailing conversion in Durgapur & Raipur is above to mark, hence there is scope for further drop in prices amid piled up stock with the mills. The conversion for Wire rod from Billet in Raipur reported at INR 5,000-5,500/MT.

Export Offers to Nepal through the Durgapur based mills fell by USD 30/MT in Jun'19 and currently evaluated at USD 485-490/MT ex-mill, equivalent to USD 515-520/MT CNF Raxaul border, Nepal. As per exporters, the fresh export deals are not taking place as buyers are in wait & watch mode with assumption of further decline in prices in coming days.

Plants Offer

-- Adhunik Industries Ltd based in Durgapur has reduced prices and reported 5.5 mm Wire rod at INR 33,800/MT & HB Wire(12 Guage) at INR 36,200/MT ex-plant.

-- Rashmi Metaliks in Durgapur (Kharagpur) heard to have offered 5.5 mm Wire rod at INR 33,500/MT ex-plant.

-- As per conversation, Shyam Metalics in Durgapur is holding Wire rod offers & sales as well due to significant falling prices.

-- Raipur based Real Ispat (GK TMT) has sharply reduced Wire rod offers by INR 500/MT to INR 34,900/MT. The prices are excluding trade discount.

-- Electrosteels in Bokaro, Jharkhand has maintained Wire rod offers and assessed (low carbon) at around INR 41,000/MT & high carbon Wire rod at about INR 43,000/MT, ex-plant & blast furnace grade material.