Indian wire rod prices exhibit mixed trends m-o-m in June 2024

Indian wire rod prices have shown mixed trends in June 2024. In the induction furnace (IF) route segment, wire rod prices declined m-o-m in June. Prices have witnessed a decrease of INR 1,700/t ($20/t) to INR 46,000/t ($551/t) exw-Durgapur and by INR 1,700/t ($20/t) to INR 46,300/t ($555/t) exw-Raipur.

The spot trade reference price stands at INR 46,300/t($555/t) exw-Raipur and INR 46,000/t ($551/t) exw Durgapur as on 18 June 2024.

Notably, for IF-route wire rods, Raipur (central region) and Durgapur (eastern region) are the major supply centers catering various other markets across the country. The cumulative daily wire rods production capacity of these two markets is around 20,000 tonnes (t), as per data maintained with BigMint.

In the BF-segment, wire rod prices (5.5-6mm, SAE1008) rose by INR 3,600/t ($43/t) m-o-m to average of INR 55,600/t ($666/t) exw-Jharkhand in May 2024. Current wire rod prices (5.5-6mm, SAE1008) stood at INR 56,500/t ($677/t) exw-Jharkhand as per BigMint's assessment on 14 June 2024.

Factors behind Market dynamics:

Drop in raw material prices: A drop in prices of raw materials (sponge iron and billet) was noticed due to a lacklustre demand in finished steel segment. On a monthly basis, prices fell by INR 2,900/t ($35/t) to 26,550/t ($318/t) exw and INR 2,350/t ($28/t) to 42,150/t ($505/t) exw m-o-m in sponge iron (PDRI FeM 80% +/- 1) and steel billet respectively in the Raipur market.

Weak buying enquires: The buying enquires remained weak in wire rod at higher price level. Binding and GI wire manufacturers steered clear of bulk procurement owing to uncertainty in market direction and purchased only as per requirement to run their mills. Such bid-offer disparity pressurized suppliers to offer attractive trade discounts to liquidate material at lower price range and avoid inventory pressure.

Primary mills hike prices: Indian primary mills increased wire rod prices by INR 500-1,000/t ($6-12/t) for June 2024 sales owing to limited availability of semi-finished steel (billet) has been prevailing in the market, which led to lesser production of wire rods. A major mill has stopped taking further orders due to unavailability of stocks in plant, highlighted some of the market sources. Meanwhile, demand from end-users continued to remain weak weighing on the market sentiments. It shall be noted that mills raised prices by INR 1,000-2,000/t ($12-24/t) for May sales.

Outlook

Participants expect a similar price trend to continue in the near-term. Buyers are likely to remain cautious taking into account the current market scenario and ongoing price correction. While, in the BF segment, prices may remain at current levels until issues of billet shortages ease and production gets restored.