Major secondary mills in Raipur (central India) are skipping fresh bulk orders for HB Wire due to shortage of material.
Driving factors behind HB Wire rod shortage
— Lower production for HB Wire by major secondary mills which are operating at around 40-50% capacity due to labor shortage
— Few of major secondary mills also have own GI Wire productions, thus they are largely consuming HB Wire which in turn has reduced supply in merchant market to around 20%
— Active demand from standalone GI Wire producers for HB Wire rather than Wire rod due to labor shortage.
— It is learned that the Raipur based plants are taking bookings only 20-30% depending upon Wire rod orders & if someone wants to book only HB Wire, the producers are not taking orders.
Current offers
The current offers of HB Wire (12 Gauge) of the Raipur based plants stood at INR 35,800/MT EXW, while in Durgapur offers are hovering at INR 36,300-500/MT EXW.
What may happen ?
Sources are of the view that the mills may increase gauge parity from Wire rod (5.5 mm) to HB Wire (12 Gauge) by INR 200/MT to INR 2,600/MT, which is currently hovering at INR 2,400/MT in Raipur.
It is also expected that, due to shortage of HB Wire, GI Wire prices may remain supported followed by active demand and lower production.
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