India’s induction furnace (IF)-route wire rods market observed limited buying enquiries this week in the major supplying markets of the central (Raipur) and the eastern (Durgapur) regions of the country.
On a weekly basis, as per SteelMint assessment, the trade reference prices for wire rods in Raipur dropped by INR 1,200/t to INR 50,000/t as against INR 51,200/t exw and similarly, in the Durgapur market, the drop was by INR 1,300/t to INR 50,000 against INR 51,300/t exw seen in the previous week.
The prices drifted downward w-o-w owing to bid-offer disparity. Subdued buying interest forced sellers to offer higher discounts. However, market sentiments from buyers end continued to remain same.
Factors behind fall in prices
Limited buying enquiries: The wire rod market witnessed few transactions — as deals of only for around 11,850 t were recorded in the Raipur market by SteelMint during the week. Although initially manufacturers tried to maintain higher offers, lacklustre sales resulted in price reductions.
Fluctuation in semi-finished steel prices: Prices of raw material for wire rod — like steel billets — also witnessed a decline on a weekly basis, which led to a similar trend in the finished steel segment as well. At present, billet prices (100x100mm, IS 2831) stand at INR 46,000/t (exw), down by INR 750/t w-o-w, as per the SteelMint Billet Index, Raipur.
Adjusted production: It has been observed that wire-rod productions have been adjusted in both the markets owing to declining purchase enquiries and fewer trades in the spot market which led to a slight inventory pressure on manufacturers. In the Raipur market, some suppliers currently have either halted or adjusted production and have shifted to other commodities in which they get better margins compared to wire rods.
Outlook: Wire rod prices may remain rangebound in the coming days owing to weak buying interest at higher offer prices.
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