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Indian wire rod prices increase m-o-m in Apr'24

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BigMint Bureau

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10 May 2024, 19:03 IST

Indian wire rod prices increase m-o-m in Apr'24

Improved buying seen in IF segment

Primary mills take maintenance shutdown

Raw materials, semi-finished steel prices rise

Indian wire rod prices rose m-o-m in April 2024. Prices of induction furnace (IF) route wire rods witnessed increase of INR 3,350/t ($40/t) m-o-m to INR 46,850/t ($561/t) exw-Durgapur and by INR 3,800/t ($46/t) to INR 47,100/t ($564/t) exw-Raipur during the month.

The rising trend of prices continues and currently the spot trade reference price stands at INR 48,000-48,500/t ($575-581/t) exw-Raipur and Durgapur.

Notably, for IF-route wire rods, Raipur (central region) and Durgapur (eastern region) are the major supply centres feeding 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 2,500/t ($30/t) m-o-m to INR 54,000/t ($647/t) exw-Jharkhand in April and further by INR 3,700/t ($44/t) to monthly average of INR 57,700/t ($691/t) in May.

Factors behind rise in prices:

Improved buying activity in IF segment: The positive market sentiments coupled with active demand forced traders to book bulk volumes which reduced the inventory pressure on sellers. This also led to an increase in prices as manufacturers reported good dispatches. However, on higher prices buyers are cautious to procure the material.

Price hike by primary mills: Indian primary steel makers have increased wire rod prices by up to INR 4,500/t ($54/t) for April 2024 sales amid rise in prices of other finish long steel products. In addition, issues of material shortage in semi-finish steel (billet) are there in market as mills have been under maintenance shutdown during the period which resulted in lower supplies into the market. This has also supported the hike in prices of long steel products, as per market sources. Meanwhile, demand from end-users was lukewarm since last month.

Furthermore, Major primary steel manufacturers increased wire rod prices by INR 1,000-2,000/t ($12-24/t) for early-May'24 dispatches.

Rising prices of raw materials, semi-finished steel: An upward trend in sponge iron and steel billet prices was observed in April'24 which pushed manufacturers to increase prices of wire rods. Sponge iron (PDRI, FeM 80%) prices increased by INR 2,500/t ($30/t) to INR 29,100/t ($349/t) exw-Raipur and by INR 2,700/t ($32/t) to INR 28,400/t ($340/t) DAP-Durgapur market in April. Billet prices rose by INR 3,050/t ($37/t) m-o-m to INR 42,850/t ($513/t) exw-Raipur and INR 3,800/t ($46/t) to INR 43,000/t ($515/t) DAP-Durgapur. The data shows such price hike in raw material pressurized the makers to hike wire prices.

Outlook:

Prices of IF-route wire rods may see marginal fluctuation in the coming days, while BF-route wire rods might witness a rise from current levels mills due to prevailing availability issues of billets and maintenance going on at some mills.