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Indian tier-1 mills lower rebar list prices m-o-m for early-July sales

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BigMint Bureau

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5 Jul 2023, 19:21 IST

Indian tier-1 mills lower rebar list prices m-o-m for early-July sales

Indian primary mills have announced a reduction of INR 3,000/t ($36/t) in rebar list prices m-o-m for early-July 2023 sales, sources informed SteelMint. Post-revision, mill-wise effective prices are as follows:

JSW Steel:
Rebars (12-32mm, IS1786): INR 51,500/t ($626/t), landed Mumbai.
Wire rods (5.5-6mm, SAE1008): INR 53,000/t ($644/t), landed Mumbai.

Jindal Steel & Power Limited (JSPL):
Rebars (12-32mm, IS1786): INR 52,000-52,500/t ($632-638/t), landed Delhi
Wire rods (5.5-6mm, SAE1008): INR 53,500/t ($650/t), landed Delhi

ESL:
Rebars (12-32mm, IS1786): INR 52,000/t ($632/t), ex-Delhi
Wire rods (5.5-6mm, SAE1008): INR 53,000-53,500/t ($645-651/t), ex-Delhi

Prices are excluding GST at 18%.
*Note- Schemes/discounts and rebates are additional on the above prices.

Why have mills lowered list prices?

1. Raw material prices drop: Prices of key steelmaking raw material, iron ore fines (Fe 62%), registered a drop of INR 150/t ($2/t) m-o-m to INR 5,350/t ($65/t) in June as against INR 5,500/t ($67/t) a month ago.

SteelMint's weekly Odisha iron ore fines Fe 62% index dropped INR 250/t ($3/t) on a weekly basis to INR 4,950/t ($60/t) ex-mines as on 1 July.

Australian premium hard coking coal (HCC) prices inched down by $2/t m-o-m to $244/t CNF Paradip this month as compared with $246/t a month ago.

2. BF-IF rebar price gap narrows: Average induction furnace (IF)-route rebar prices fell by INR 2,500/t ($30/t) m-o-m in June to INR 50,800/t ($618/t) exw-Mumbai compared to INR 53,300/t ($648/t) in May. Blast furnace-route rebar, last month, fell by a steeper INR 3,300/t ($40/t) exy-Mumbai to INR 53,600/t ($652/t) from INR 56,900/t ($692/t) in May. But since the IFs control 65-70% of the rebar market, and there is also a production glut, tier-1 mills were forced to further reduce July prices.

3. Property registrations fall y-o-y: Property registrations in the country's largest real estate market, Mumbai, edged down by 2% on the year to 9,729 units in June 2023 as against 9,919 units in the same period previous year. The same inched lower by 1% m-o-m from 9,823 units in May 2023, as per the latest data released by Knight Frank India. Since the construction sector is the largest consumer of rebars, a drop in demand here has further forced the price cut.

4. Slow demand from projects: Project segment buyers, the largest consumers of rebars, remained cautious and procured only on urgent requirement basis anticipating further price falls. July is in the thick of the monsoon season, when construction takes a hit, warranting a price cut. Current rebar prices in the projects segment are hovering at INR 50,000-51,000/t ($608-620/t) FOR Mumbai registering drop of INR 3,500-4,000/t ($43-49/t) as against INR 54,000/t ($656/t) seen in early-June 2023.