Indian primary mills hike rebar list prices by up to INR 3,000/t ($36/t) for early-Jan'23

Indian primary mills have announced a hike in rebar list prices by up to INR 3,000/t ($36/t) for early January 2023 dispatches. Post revision, mill-wise prices stand at:

• Jindal Steel and Power Limited (JSPL): INR 59,800/t ($725/t), ex-Delhi
  
  
• Steel Authority of India Limited (SAIL): INR 58,000-58,500/t ($703-709/t), ex-Mumbai
  
  
• JSW Steel: INR 59,500-60,000/t ($721-728/t), ex-Mumbai
  
  
• Prices are excluding GST at 18%.
  
  

Factors behind price hike

1.Increase in raw material prices: Prices of steelmaking raw materials have been on the rise. SteelMint's iron ore fines Odisha Index (0-10 mm, Fe62%) has increased on a monthly basis to an average of INR 4,420/t ($54/t) in December against INR 3,550/t ($43/t) a month ago. Furthermore, the largest merchant iron ore mining company, NMDC, has announced a hike in iron ore prices by up to INR 600/t ($7/t). Prices of lump ore were raised by INR 500-600/t ($6-7/t) and fines by INR 500/t ($6/t), effective from 1 January.

Coking coal prices have also risen in January to $312/t CFR India levels from $277/t in December.

2.Strong housing demand: Property registrations in Mumbai's real estate market have increased by 9% on the year to 1.22 lakh units on the back of strong demand and economic growth. A point to note here is registrations in 2022 were the highest in the last 10 years.

3.Healthy demand from projects: Demand from the projects segment has remained healthy in Q3FY23. "We are getting robust order bookings from the projects segment and have booked sizeable volumes till the mid of next month", a source informed SteelMint. Also, demand is likely to remain strong in the next quarter. Government infrastructure and construction projects generally pick up pace during the last quarter of the financial year as they need to stick to completion timelines.

4.IF-route rebar prices rise further: Trade prices of induction furnace-route rebar have been on the rise, witnessing a gain of around INR 1,500-2,000/t ($18-24/t) across markets which has lent support to blast furnace (BF) rebar trade prices. The disruption in sponge iron production in Odisha due to the World Cup Hockey Tournament has led to an increase in sponge iron prices and prices of semi-finished products like billets. As a result, higher cost of production for IF-route rebar manufacturers is lending support to trade-level prices. It is to be noted that IF rebar enjoys 65-70% of the market share in India.

IF route rebar (IF, 12-25 mm, Fe 500) trade prices stood at INR 56,300-56,700/t ($683-688/t) exw-Mumbai on 5 January as against INR 54,700-55,100/t ($663-668/t) on 30 December 2022.