India’s leading tier 1 mills have increased list prices of rebar by INR 750-1,000/tonne ($9-12/t) during the week. Current list prices are hovering around INR 50,000-51,000/t ($596-608/t) on landed basis. It may be noted here that mills have reduced prices earlier this month.
Following the price hike, trade-level rebar prices witnessed a rise on weekly basis across major markets. Meanwhile, buying activities continued to remain weak in the traders’ market. Currently, rebar prices (12-32mm, Fe500D, and Fe550D) in the trade segment rose by INR 700/t ($8/t) w-o-w to INR 50,300/t ($599/t) exy-Mumbai, excluding 18% GST.
In the projects segment, prices were hovering in the range of INR 48,000-49,000/t ($572-584/t) landed Mumbai basis.
Factors behind market dynamics:
1. IF rebar prices range-bound w-o-w: Induction Furnace (IF) rebar manufacturers attempted to raise rebar prices during the start of the week, but due to weak demand prices again came back to same levels. Manufacturers offered trade discounts based on inquiries, with buying activities remaining need-based throughout the week. Meanwhile, mills have reduced production by 20-25% due to rising inventories, which are currently ranging from 12-15 days across markets. Trade-level IF-rebar prices remained stable w-o-w at INR 45,800/t ($545/t) exw-Mumbai.
The price gap between BF-IF rebars stood at around INR 4,000-4,500/t ($48-54/t) in the Mumbai market. Notably, IF-rebars enjoy 65-70% share of the market.
2. BF-rebar prices hit 3-year low in August: BF–rebar trade prices have hit nearly 3-year low levels in August 2024 as similar levels were last seen in July 2021. On a monthly basis, prices were down by INR 3,200/t ($38/t) to average of INR 50,200/t ($598/t) in August.
In addition, some of the leading steel mills implemented maintenance shutdowns or adjusted production during the July-August period due to the weak buying in monsoon and increased inventory levels at their yards. Additionally, billet shortages in the market affected rebar production. As a result, around 1.5- 2 lakh tonnes of production volume was impacted over the two months.
Outlook
IF-rebar prices may remain range-bound in the coming days. Market focus will shift to BF-rebar prices as mills are likely to release their list prices for early-September dispatches.
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