India: Primary mills keep rebar project prices unchanged, likely to rise in near term

Indian primary steel mills have rolled over their monthly rebar contract prices for the project segment for December sales, SteelMint learnt from sources. Effective prices are at INR 55,000-56,000/t ($668-681/t) FOR Mumbai.

Why prices may remain supported?

1. IF-route rebar trade prices rise w-o-w: IF rebar trade prices have witnessed an increase of nearly INR 500-600/t ($6-7/t) w-o-w to a weekly average of INR 53,100/t ($646/t) this week. This is lending support to BF-route rebar trade prices, which are assessed at INR 56,100/t ($682/t) exy-Mumbai, excluding GST at 18%.

2. Lifting of construction ban in NCR: The restrictions imposed under stage 3 of the Graded Response Action Plan (GRAP) in the Delhi-National Capital Region (NCR) region has been revoked by the Committee for Air Quality Management (CAQM) on 7 December following a significant improvement in air quality, leading to removal of the ban on construction and demolition activities in the region. This has improved demand from the Delhi-NCR region, informed industry sources.

3. Housing demand stays supported: Demand from the housing sector remained supported against the backdrop of special festive offers. Property registrations in the Mumbai metropolitan region, which is the largest real estate market in India, went up by 15% on the year to 8,756 units in November.

4. Raw material prices rangebound: Prices of steelmaking raw materials such as coking coal and iron ore remain largely stable. For instance, coking coal (Australian premium HCC) prices have remained rangebound at $260-265/t CFR Paradip since the last week of November amid subdued buying interest in the global market.

SteelMint's Odisha iron ore fines index (Fe 62%) remained rangebound m-o-m at INR 3,550/t ($43/t) in November compared with INR 3,560/t ($43/t) in October. This is likely to keep rebar prices supported.

Outlook
Prices are likely to increase by INR 500-1,000/t ($6-12/t) in the near term and remain supported, thanks to healthy demand from the project segment as deadlines for completions approach ahead of the closure of the ongoing financial year.