India: BF-rebar trade prices rise w-o-w amid limited material availability

• Material shortages supporting trade-level prices
• IF-rebar tags increase w-o-w amid improved bookings

Trade-level BF-rebar prices have witnessed a rise w-o-w amid ongoing supply shortages across major Indian markets. Logistics disruptions have impacted supplies, and this has created a dearth of material in the distribution channel, BigMint heard from market sources. In addition, rebar inventories are currently at all-time low at the yards.

Major steel mills have increased rebar prices by INR 500-1,000/t ($6-12/t) during the week. Post revision, list prices hovered at around INR 53,500-54,500/t ($611-623/t) on a landed basis.

Trade-level BF rebar prices rose w-o-w by INR 600/t ($7/t) to INR 53,200/tonne (t) ($608/t) exy in Mumbai, as per BigMint’s assessment on 28 February. Prices are exclusive of GST at 18%.

In the projects segment, mills have secured substantial project orders but face challenges in fulfillment due to limited stock availability. The diversion of material to projects has been one of the prime reasons for shortages in the trade network.

Market dynamics

1. IF rebar prices rise w-o-w: Induction furnace (IF) rebar trade prices rose on a weekly basis amid improved bookings. Market participants booked adequate quantities which lent support to prices. Manufacturers increased their prices and reduced discounts. Prices of sponge iron and billets also witnessed an increase during the period. Inventory idling time decreased to around 10-12 days across markets. As per BigMint’s assessment, IF rebar prices rose by INR 500/t ($6/t) w-o-w to INR 49,100/t ($561/t) exw-Mumbai.

The price gap between BF-IF rebars narrowed to around INR 4,500-5,000/t ($51-57/t) in the Mumbai market. Notably, IF rebars command a 65-70% share of the market.

2. Raw material prices edge up w-o-w: BigMint’s Odisha iron ore fines (Fe 62%) index inched up by INR 150/t ($2/t) w-o-w to INR 5,000/t ($57/t) on 22 February. Iron ore fines prices in Odisha are firm after the recent OMC auction, while lump prices remain stable. Market participants await clearer price trends as major miners have yet to revise their offers.

Additionally, Australian premium hard coking coal (PHCC) prices edged up by $1/t w-o-w to $203/t CNF Paradip.

Outlook
Trade prices may remain on the upside in the coming days amid ongoing material shortages in many regions. Furthermore, mills’ price announcements for next month is also awaited.