India’s induction furnace (IF) wire rod market witnessed a price correction of up to INR 1,100/t w-o-w as demand continued to remain weak in the major markets of Raipur and Durgapur in central and eastern India. Deals of around 9,450 t were recorded in Raipur this week, as per SteelMint data.
On a weekly basis, wire rod trade reference prices in Raipur decreased by INR 700/t to INR 51,300/t as against INR 52,000/t, while prices in Durgapur dropped INR 1,100/t to INR 51,400/t as against 52,500/t last week.
Notably, Raipur and Durgapur are the major supply centres of IF route wire rod. Total daily wire rod production capacity of these two markets stands at around 20,000 t. That apart, in Chaibasa (Jharkhand), a major producer has started wire rod production with a daily capacity of 1,000 t.
In the Raipur market, some suppliers have either halted or adjusted production and have shifted to other commodities in the hope of better margins.
Weekly trade dynamics-
Limited buying enquiries: The wire rod market observed relatively low buying enquiries and trades this week. Resistance from traders to procure material at offer prices as well as bearish trend in the raw materials segment forced manufacturers to reduce prices. Along with wire rod, sales of GI and binding wire also remained dull.
Price movement: This week saw a slight decline in prices of raw materials along with weak market sentiments in the northern region which impacted wire rod prices. Marginal rise in inventory as well as competitive prices to liquidate material prompted suppliers to offer discounts as per quantity and payment terms.
The trade reference price as on 27 January stood at INR 51,000-51,500/t exw Raipur and INR 51,300-51,700/t exw Durgapur.
Outlook: Since demand has remained low despite a drop in offer prices, wire rod prices are anticipated to fluctuate in the near term. However, sellers are less likely to reduce offers below the current level considering prevailing price trends in the semi-finished steel segment.
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