Indian primary steel mills have raised their monthly rebar contract prices for the projects segment for early-February 2023 sales. Subsequent to the revision, effective prices are in the range of INR 64,000-65,000/t ($775-787/t) FOR Mumbai, SteelMint learnt from sources.
Factors keeping prices supported:
1. Increase in raw material prices: Prices of key steelmaking raw materials such as coal have been on the rise. Meanwhile, iron ore fines prices remained unchanged on a weekly basis.
The weekly average price of Australian-origin premium hard coking coal (HCC) stood at $356/t CNF India on 4 February 2023. Prices have increased by $16/t against the weekly average of $340/t CNF India a week ago. The same rose sharply by around $51/t m-o-m to $328/t CNF India in January against $277/t CNF India seen in December.
Meanwhile, SteelMint’s weekly Odisha iron ore fines Fe 63% index remained stable w-o-w at INR 5,750/t ($70/t) ex-mines as on 4 February. Prices have registered a rise of INR 650/t ($8/t) against INR 5,100/t ($62/t) seen during the first week of January.
2. Healthy demand ahead of financial year end: Rebar prices have remained strong in January amid healthy demand from the infrastructure and construction segments as the last quarter of the fiscal year is the time when construction companies strive to meet their yearly completion targets. Furthermore, mills have raised their contract prices for project sales on anticipation of healthy procurement activities from end-users in the remaining two months of Q4FY’23.
3. Hike in global rebar offers: Steelmakers globally have announced increase in rebar prices for early-February. For instance, Chinese steelmaker Shagang Steel has lifted rebar (16-25mm, HRB400) prices by RMB 200/t ($30/t) to RMB 4,400/t ($649/t), ex-mill, including VAT for early-February sales.
UAE’s leading steelmaker, Emirates Steel has increased rebar offers by AED 62/t ($17/t) m-o-m for February deliveries. Revised offers stand at AED 2,442/t ($665/t) exw compared with AED 2,380/t ($648/t) last month. A hike in scrap offers and rising global rebar prices have supported the price hike.
Outlook
SteelMint understands from industry sources that a few primary mills are yet to finalise their contract prices with real estate players and the negotiations are still underway. It has also been learnt that current dispatches are against the orders executed in January. Thus, real estate players are booking quantities with the secondary steel manufacturers in the first half of February. Current week’s indications of BF route rebar prices are rangebound w-o-w at INR 63,000-64,000/t ($763-775/t), exy-Mumbai, excluding GST at 18%. Meanwhile, IF route rebar prices have fallen by upto INR 1,000/t ($12/t) on weekly basis across various markets.
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