Indian primary steel producers have further reduced BF-route rebar prices for mid-May 2022 sales, SteelMint learnt from sources.
Current list prices:
- Steel Authority of India Ltd. (SAIL) has recently adjusted its rebar (12-32mm, IS1786) list prices with effect from 10 May 2022. Post-revision, the effective price stands at INR 68,000-68,500/t ($877-884/t) ex-Mumbai and INR 65,000-65,500/t ($838-845/t) on ex-plant basis, excluding GST at 18%.
- Jindal Steel and Power Ltd (JSPL) has corrected rebar (12-32mm, IS1786) prices with effect from 10 May 2022. The effective price stands at INR 65,500-66,000/t ($845-852/t) on ex-plant basis, and INR 69,500-70,000/t ($897-903/t) delivered Delhi-basis, excluding GST at 18%.
Why have prices edged down?
Drop in export offers: Indian mills are offering BF-route rebar (B500B) for exports at around $790-800/t CFR Hong Kong on an actual weight (AW) basis, down by almost $25/t w-o-w and a sharp $130/t m-o-m basis. Export prices have softened on lucrative offer from other exporting nations such as the Middle-East and Turkey.
Export volumes too have registered a significant drop. Indian steel exports stood at 1.35 million tonnes in April, in which long steel exports comprised 7% while the rest comprised flats and semis. Rebar exports dropped significantly to 0.02 mnt in April, from 0.05 mnt a month ago.
Wait-and-watch stance: End-users have adopted a wait-and-watch stance due to continual decline in prices. “Our buyers are enquiring, for say 1,000 tonnes of material, but only placing purchase orders for about 200 t, due to fear of further drop in prices,” informed a source from southern India.
“There is limited demand currently. Only need-based procurement is happening,” said an official with a large infra company.
Panic selling to offload higher inventories: Sluggish downstream demand along with reduced exports have raised inventories at mills, which they are keen to offload. For instance, Rashtriya Ispat Nigam Limited’s closing stock in early April was up 47% m-o-m and other mills are possibly holding relatively higher volumes.
Outlook
The domestic market is likely to foresee rebar prices under pressure in the short-to-medium term on the back of approaching monsoon when construction activities slow down, leading to increased inventories with mills.
On the other hand, due to dull market sentiments and upcoming seasonal lull, mills may undertake their planned maintenance. For instance, ESL, a Vedanta subsidiary, is likely to undertake planned maintenance shutdown of one of its two blast furnaces starting from 18 May 2022, for 45 days.
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