India: Slack Demand of Wire Rod persists in Durgapur & Raipur

Sluggish demand of Wire Rod in Durgapur market has led to decline in prices by INR 400/MT W-o-W. While, discount is being offered in Raipur on bulk purchase.

Indian Wire market has been inactive since a month on the background of lull demand from the end-users. Declining prices of raw material and semi finish coupled with lack of infrastructural activities across the nation has weakened the Wire market sentiments.The market is unlikely to show any uptick in coming weeks as rise in inventory at mills/stockiest have left the manufacturers with no option.

Currently in Raipur, 5.5 mm Wire Rod and 12G HB wire are being offered at INR 36,800/MT and INR 39,200/MT respectively. The same material in Durgapur is being offered at INR 35,500/MT and INR 38,100/MT respectively and has witnessed a fall of INR 500/MT.

Demand seems to be slow and there is tight liquidity crunch in the market, leading to poor payment condition.

As per a manufacturer in Raipur, “The market is extremely dull as a result we have cut down our production.”

He further added that imported Wire Rod is making its way to all the markets across India. As a result, demand for domestic Wire Rod is deteriorating.

A GI manufacturer in Raipur remarked, “A discount of upto INR 1,000/MT is being offered on bulk purchase of material i.e. above 100 MT.”

Presently, 20G Binding wire in Raipur is being offered at INR 43,000/MT and in Durgapur at INR 45,500/MT. Durgapur market has witnessed a fall of INR 400/MT. While, demand of 12G GI wire and 12G Barbed wire in Raipur market is also very dull and the material are being offered at INR 44,000-44,300/MT and INR 46,000/MT respectively. Prices have declined by INR 400/MTand INR 300/MT for GI wire and Barbed wire respectively.

On the other hand, with upcoming Union Budget, it is anticipated that demand will improve and the market may boost up to some extent.

Note: Prices above are including all taxes.

Expected Hike of 10-12% on Wire Import Duty in Upcoming Budget

SteelMint learned that imports of Wire have declined from Dec’14 to Jan’15. The imported quantity in the month of Dec’14 was 182,909 MT and in Jan’15 was 1,43,744 MT. But, due to high inventory of imported material, the domestic Wire Rod is still finding hard to survive in the market. The imported Wire Rod not only has a better quality, but also has a cheaper price.

Market participants anticipate high import duty in steel products to be announced by the government in this fiscal Budget. As per market sources, minimum 10-12% of duty is expected to be imposed on all Steel products imported in India to safeguard the domestic steel mills. Present import duty on Wire Rod is approx 5%.

Wire Import in Dec’14 & Jan’15

Quantity in MT

An importer from Mumbai explained, “Imported Wire Rod offers have maintained a steady rate at UDS 410/MT, CFR Mumbai with 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. There may be new imported offers after a week since holidays have started in China.”

He also added, “A cargo containing 17,000 MT Wire Rod has reached Mumbai Port and unloading has begun.”

Weekly Price Change of 5.5 mm Wire Rod &  MS Billet

Basic prices in INR/MT as on 16 Feb’15
ED and VAT/CST extra
Source: SteelMint Research