Indian tier-1 mills have rolled over list prices of BF-route rebar for early-December 2022 sales. Post revision, effective prices for rebar (12-32 mm, IS1786) are:
- Jindal Steel and Power Limited (JSPL): INR 57,800/t ($707/t) ex-Delhi
- Steel Authority of India Limited (SAIL): INR 55,500/t ($679/t) ex-Mumbai
- JSW Steel: INR 56,000/t ($684/t) ex-Mumbai
- ESL Steel Limited: INR 57,500-58,000/t ($703-710/t), ex-Delhi
Prices are exclusive of 18% GST.
Why prices remain unchanged?
1. Drop in raw material prices: Coking coal (Australian premium HCC) prices have dropped m-o-m to a monthly average of $301/t CFR Paradip in November against $309/t CFR Paradip in October. Prices have fallen on the back of low buying interest amid sluggish global steel demand as well as concerns related to oversupply.
Odisha iron ore fines index (Fe 62%), remained largely rangebound m-o-m at INR 3,550/t ($43/t) in November compared with INR 3,560/t ($43/t) in October.
2. Housing demand remains rangebound: Despite geopolitical headwinds, demand from the housing sector remained rangebound on the backdrop of special festive offers. Property registrations in the Mumbai metropolitan region, which is the largest real estate market in India, were up by 4% m-o-m to 8,756 units in November compared with 8,276 units in the previous month. Also, registrations increased 15% y-o-y during the period.
3. Volatility in IF-route rebar prices: IF-route rebar prices were at around INR 55,300-55,900/t ($676-683/t) levels exw-Mumbai in late-October, but continuous decline in prices of semi-finished steel and need-based buying by buyers led to piling up of inventories at mills. As a result, offers for IF rebar started declining and touched a one-year low level of INR 50,000/t ($611/t) on 18 November. Furthermore, the rollback of export duties by the Indian government on 18 November led to rise in offers, but failed to ignite demand as buyers stayed on the sidelines due to higher prices.
Due to the October spread between BF-IF route rebar trade prices, which was around INR 800/t ($10/t), most end-users preffered buying from the primary mills. This led to a drop in monthly average induction furnace (IF)-route rebar trade prices to around INR 52,700/t ($644/t) in November as against INR 55,600/t ($680/t) in October, witnessing a drop of nearly INR 3,000/t ($37/t) m-o-m. It is to be noted that IF rebar enjoys 65-70% of the market share. On the other hand, BF route rebar trade prices fell by about INR 800/t ($10/t) to INR 56,000/t ($685/t) in November against INR 56,800/t ($695/t) a month ago.
The sharp fall in IF rebar prices have widened the gap between IF-BF rebar prices to around INR 3,000-3,500/t ($37-43/t) in November compared with INR 500-1,000/t ($6-12/t) in October.
Outlook
Price levels are likely to sustain on the back of heathly demand from infra and construction segment which comprises of 60% of overall domestic steel demand.
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