- BF-rebar prices remain range-bound in February
- Production cut by tier-1 mills
- Moderate buying in IF-rebar segment
Indian tier-1 mills have rolled over rebar list prices m-o-m for early-March 2024 deliveries, sources informed BigMint. Current list prices are hovering around INR 52,000-53,000/t ($629-641/t) on landed basis. It can be recalled that the price hike of up to INR 1,000/t ($12/t) for early-February 2024 and production cuts opted by mills last month prevented trade-level rebar prices from falling further and kept them range-bound during the period despite of slow buying activities in the market.
Factors behind market dynamics:
1. Production cut by tier-1 mills: With inventories rising to more than 6,00,000 t in January, mills opted for production cuts which sucked out 80,000-1,00,000 t of rebar inventories from market last month. This resulted in a drop of 10% in inventories to 5,50,000 t in February, sources informed BigMint. This helped restore the supply-demand mismatch to some extent and supported trade-level rebar prices. On m-o-m basis, blast furnace (BF) rebar trade prices remained stable at INR 51,800/t ($626/t), exy-Mumbai in February.
Meanwhile, project prices have already bottomed out to INR 49,500-50,000/t ($599-605/t) landed Mumbai basis as seen in end-February amid need based procurements from end-users. There has been a decrease in offtake of projects ahead of elections this year.
2. Moderate buying in IF-rebar segment: Induction furnace (IF) rebar prices fell on monthly basis to average of INR 48,250/t ($584/t) exw-Mumbai in February 2024 against INR 48,700/t ($589/t) in previous month. Buying activities improved with active demand from both retail and projects segment and manufacturers tried to increase prices, meanwhile limited buying happened at higher prices in last few days. Inventories days of mills reduced to 7-days levels in February against usual of 10-15 days in January 2024, as per market sources. Current IF-rebar trade prices were assessed at INR 49,500/t ($599/t), exw-Mumbai. It must be noted that IF based mills command 65-70% share in rebar market.
The gap between BF-IF rebars stood at INR 3,500-4,000/t ($42-48/t) in February as compared with INR 3,000-3,500/t ($36-42/t) in the previous month.
3. Property registrations rise m-o-m: Property registrations in the country’s largest real estate market, Mumbai registered 8% rise m-o-m to 11,742 units in February 2024 as compared with 10,900 units in the previous month, as per data released by Knight Frank India. The same increased by 21% y-o-y as against 9,684 units in February 2023.
Outlook:
Market sources feel that prices are likely to remain steady in the near term. Furthermore, some private mills are mulling to curb rebar production considering the higher inventories and slow market activities.