SteelMint in conversation with participants learned that, selling pressure is mounting with the Durgapur (eastern India) based mills, whose contribution in Indian wire rod productions is about 15%.
Out of total wire rod production in India, close to 60% is produced by large scale mills & remaining by mid sized (secondary mills) which are largely based in Raipur & Durgapur.
Near to 15-20 mid sized wire rod mills are based in Raipur & Durgapur, in which each mills daily production capacity is close to 500-1,000 MT and the producers are supplying material across India.
In current circumstances as the steel prices are declining, the Wire rod mills are facing poor lifting of earlier orders along with limited fresh bookings. This has resulted in increasing inventories with them, SteelMint heard from the mills & traders as well.
Hence, the plants are willing for bulk order to provide additional discount. For instance in Durgapur as compared to price quotation of the mills, they dealing are at less price by around INR 200-300/MT which were earlier used to INR 100/MT less than the quotation.
Similarly in Raipur, where resellers are providing discount high of INR 500/MT than through the mills. During last day (13th Jun’19), trade discounts in Raipur Wire rod through the mills observed by INR 1,000-1,200/MT, meanwhile traders were dealing with discount of INR 1,500-1,700/MT in line to improve lifting as well attract healthy bookings.
As per assessment, the current trade reference prices of 5.5mm Wire rod stood at INR 34,700-35,500/MT ex-Raipur & INR 34,800-35,400/MT ex-Durgapur, excluding 18% GST.
Export deals concluded at lower offers
The domestic Wire rod (5.5mm) offers in Durgapur, eastern India is hovering at INR 34,800-35,500/MT, equivalent to USD 500-510/MT (ex-mill). However export deals to Nepal were made at close to USD 500/MT ex-mill.
Further if participants are to believed one of mills in Kharagpur has concluded deals in rake couple of days ago at less than of USD 500/MT ex-mill, which attract freight cost to Nepal at around USD 30-35/MT CNF Raxaul border.
Meanwhile it is being learned that large mills are facing limited deals in domestic & exports as well. The current export offers to Nepal of Wire rod (grade – SAE 1008, 5.5-6.00) is hovering at USD 550-560/MT CNF Raxaul border, Nepal.
In addition, as per sources, recent floated Wire rod export tender to Nepal by a state owned steel mill, has received average response. As per them, the highest bid for the tender was received at around USD 510-515/MT ex-mill.
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