The major steel producers in India like – SAIL, TATA & JSW Steel which have already increased rebars offers by INR 500-1,000/MT couple of times in Dec’17 have further raised prices this week with immediate effect by INR 1,500-2,000/MT (USD 23-31), SteelMint learnt from company officials.
The current reference trade prices for 12-25mm re-bars are reported at around INR 38,000-39,000/MT & Wire rod at INR 40,000-41,000/MT ex-Mumbai & excluding 18% GST.
According to SteelMint assessment the total price rise in current month by large producers is around INR 3,000-4,000/MT (USD 45-60). Meanwhile, in the same time, medium mills have increased prices by INR 3,000-5,000/MT (USD 45-75).
Reasons behind the price rally
Healthy Exports Orders: One of the major reasons for the ongoing price rally as mentioned is strong export orders. According to officials of JSW Steel, RINL & SAIL they have healthy export orders in hand for next couple of months for semis and long products.
Recent, RINL has concluded its major export tender of 55,000 Billet at around USD 500/MT, FoB India. Meanwhile, RINL’s and SAIL’s export tenders for billet and wire rod are presently live are expected to get high bids from global buyers. Inquiries from overseas buyers have remained strong due to none availability of China and CIS cargoes owing to winter production cuts and high congestion’s at the ports.
According to JPC (Govt data), India’s finish long exports increase by 57.1% to 6.639 MnT during Apr-Nov’17 against same period last year at 2.9 MnT.
Rally in raw materials: With the consistent price rise in key fuels like coking coal, iron ore and scrap, the manufacturer’s input costs have also risen rapidly. Since the last couple of month’s global coking coal and scrap prices surged by about USD 50-70/MT. At the same time, Indian iron ore prices have also increase by about INR 800-1,000/MT (USD 12-15).
In a bid to meet high input cost, the producers are now compelled to trade at higher prices to balance their books.
Narrowed price gap between medium and large producers: With rapid rise in offers by medium mills the price gap on rebars between Indian medium and large producers has narrowed down to INR 1,500-2,000/MT against the earlier gap of about INR 3,000-4,000/MT.
Currently rebar offers in Mumbai by medium mills are hovering at around INR 36,500-37,000/MT while by large producers namely including JSW Steel and RINL the offers have reportedly risen to around INR 38,000-39,000/MT. The prices are ex-works & excluding GST.
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