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Indian tier 1 mills reduce rebar list prices by INR 2,500-3,000/t ($30-36/t) m-o-m for Aug'24

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BigMint Bureau

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7 Aug 2024, 15:33 IST

Indian tier 1 mills reduce rebar list prices by INR 2,500-3,000/t ($30-36/t) m-o-m for Aug'24

Higher inventories with tier 1 mills

IF-rebar prices decline m-o-m

Indian tier 1 mills have reduced list prices of rebars by INR 2,500-3,000/t ($30-36/t) m-o-m for early-August 2024 deliveries, sources informed BigMint. Current list prices are hovering around INR 51,000-52,000/t ($607-619/t) on landed basis. It must be noted that mills have given interim rebates and discounts during the month.

Trade-level blast furnace (BF) rebar prices dropped by INR 4,000/t ($48/t) m-o-m, averaging to INR 53,400/t ($636/t) exy-Mumbai in July 2024. The decline was driven by sluggish buying in the distribution network, with buyers holding off due to the continuous price drop. Consequently, inventories with tier 1 mills increased by 30-35% over the month in July.

In the projects segment, prices were hovering around INR 49,000-49,500/t ($584-590/t) FOR Mumbai. Demand from end-user was on urgent requirement basis only.

Factors influencing market dynamics:

1. IF-rebar prices decline m-o-m: IF-rebar trade prices declined m-o-m in July 2024 due to need-based buying across markets. Buyers were cautious amid market volatility and avoided bulk purchases, prompting sellers to offer attractive discounts to clear inventories. Mills adjusted production in response to weak market sentiment and high inventories, which remained around 15 days across markets during the month.

The ongoing monsoon has slowed down construction activities, causing buyers to opt for cautious buying instead of bulk bookings. Additionally, the recent National Highways Authority of India (NHAI) show-cause notice to IF mills regarding quality maintenance negatively impacted rebar offtake.

IF-rebar trade prices declined by INR 3,800/t ($45/t) m-o-m to INR 46,700/t ($556/t) exw-Mumbai in July as against INR 50,500/t ($601/t) in June. The price gap between BF-IF rebars stood at INR 6,500-7,000/t ($77-83/t) ex-Mumbai. IF-rebars enjoy 65-70% share of the market.

2. Property registrations in July: Property registrations in the country's largest real estate market, Mumbai registered an increase of 5% m-o-m to 12,160 units in July 2024 as against 11,600 units in the month ago period.

On y-o-y basis, property registrations rose 19% against 10,200 units in July 2023.

Outlook

Market participants expect BF-rebar prices to continue their downward trend in the coming days. Conversely, IF-rebar prices hit a three-and-a-half-year low last month and may remain range-bound in the near term, depending on market activity.