Indian Wire Market remains Weak; shows no Sign of Recovery

Wire Rod prices continued to slip further and have declined by INR 900-1,200/MT M-o-M. While, imported Billet from China continues to hamper Indian domestic prices.

Wire market continued to remain sluggish with prices maintaining a declining level. At present, demand in the domestic market is very weak to support the prices. Surplus inventory of imported Wire Rod has created another problem for the manufacturers.

Slowdown in construction activities coupled with continuous decline in prices of raw material and semi finish is compelling the Wire market to remain bearish.

Billet and Rebar prices have slumped across India, which is directly affecting the Wire market.

In Raipur, 5.5 mm Wire Rod and 12G HB Wire are being offered at INR 36,600/MT and INR 38,900/MT respectively. Both the grades of wire have shown a decline of INR 500/MT W-o-W. The same material in Durgapur is being offered at INR 36,100/MT and INR 38,700/MT, showing decline of INR 300/MT W-o-W.

20G Binding Wire in Raipur and Durgapur is being offered at INR 43,000/MT and INR 46,000/MT respectively. In Raipur, a decline of INR 300/MT has been noticed. While, Durgapur has witnessed a fall of INR 800/MT for binding wire.

Currently, Barbed Wire and GI wire in Raipur are being offered at INR 46,300/MT and INR 44,600/MT respectively. Demand for both the grades of wire has been very low.

As per a manufacturer in Raipur, “Market is sluggish due to import of Chinese Wire Rod, which is not only cheaper than the domestic material but also has a better quality.”

He also added, “The only way to curb Wire Rod import is to either put a complete ban on import or decrease the production of domestic Wire Rod, thereby maintaining the demand & supply gap.”

Import of Wire Rod continues

As per Steel Ministry’s data, Bar & Rod import to India till Dec’14 was 1,270,310 MT. Average monthly import in Q3 FY15 was 240,000 MT.

SteelMint learned from a market participant, approx 70,000 MT has been booked from East India that will reach India by Mar’15. Similar threat has also been seen in West India.

An importer based in Mumbai stated, “The inventory level of imported material is at its peak. Imported Wire Rod of 6.5 mm size is being offered at around USD 410/MT, CFR Mumbai (5% import duty, CVD & SAD extra). Prices are equivalent to INR 30,000-31,000 /MT after consideration of import duty and port handling charges, VAT and other taxes extra. Domestic offers are in the range of INR 34,000-36,000/MT”.

Weekly Price Change of 5.5 mm Wire Rod & Billet

Basic prices in INR/MT as on 9 feb’15
ED and VAT/CST extra
Source: SteelMint Research