India’s induction furnace (IF)- route wire rod market witnessed a marginal increase in prices while demand remained moderate in the major markets of Raipur and Durgapur.
As per SteelMint’s assessment, wire rod trade reference prices in the Raipur market rose by INR 200/t to INR 51,500/t w-o-w as against INR 51,300/t last week. Meanwhile, prices remained stable in the Durgapur market at INR 51,800/t.
Notably, for IF-route wire rods, Raipur and Durgapur are the major supply centres feeding various other markets across the country. As per data maintained with SteelMint, cumulative daily wire rods production capacity of these two markets stands at around 20,000 tonnes (t). However, recently in Jharkhand (Chaibasa), a major supplier has started wire rods production with daily capacity of 1,000 t.
In the Raipur market, some suppliers currently have either halted or adjusted production and have shifted to other commodities in hope of better margins compared to wire rods.
Weekly trade dynamics
Moderate buying enquiries: Wire rod purchase enquiries and transactions in the spot market remained moderate during the first half of the week but picked up marginally in the latter half as active trading has been witnessed over the last couple of days. Currently, there is no sales pressure on suppliers as they have received sufficient booking orders along with smooth lifting of material.
Price movement: Initially, suppliers set higher offer prices, quoting around INR 51,800-52,000/t exw, specially in the Raipur market. However, limited buying interest from buyers at higher offer prices forced sellers to either offer trade discounts or reduce prices in order to boost sales. This encouraged buyers to take positions immediately after a price correction was seen in the market.
Trade reference price of wire rod as on 13 Jan’23 stood at INR 52,000-52,500/t exw Raipur and INR 52,100-52,500/t exw Durgapur, size 5.5 mm.
Trends in BF route wire rods market: Prices of blast furnace (BF)-route wire rods, on the other hand, continued an upward trend. JSPL, one of the leading primary steelmakers, announced a hike in the list prices of wire rods (5.5mm-6mm, SAE 1008) for the second time in January by INR 1,000/t to INR 59,000/t exy- Delhi excluding GST at 18%. Demand from the auto sector was moderate even as rising raw material prices kept wire rod prices supported.
Outlook: Wire rod prices are likely to remain rangebound in the near-term as buyers are reluctant to procure material at higher offers. However, fluctuating price trends in raw materials (steel billets) may lead to volatility in the market.
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