India’s secondary wire rod industry reported subdued demand for domestic as well exports, following which prices remained volatile in major producing markets i.e. Raipur & Durgapur.
The market sources in Durgapur, eastern India reported average demand from local users and few export deals concluded last day to Nepal from the traders/exporters end.
Offers for domestic buyers in Durgapur is hovering at INR 30,800-31,600/MT (USD 445-460) ex-mill, meanwhile export deals learned at near to USD 443-445/MT ex-mill, equivalent to USD 475/MT CFR Raxaul border.
Further, it was also analysed that couple of renowned mills in Durgapur have curtailed production by 30-50% on account of rising stock and in order to maintain margins (conversion spread) which is currently seen at around INR 4,000/MT and seems not above than required, as learned from mill owners.
Coming to Raipur, Central region where Wire rod offers are higher by INR 500-1,000/MT than in Durgapur as trade prices registered at around INR 32,000/MT ex-plant. Amid high offers in Raipur, the buyers based in north & southern India turned to source material from Durgapur over low base price.
Also in Raipur one of the major producer who has monthly rolling capacity of about one lakh tone has reduced wire rod productions by around 30% in order to clear inventories. Also as per an official they have shifted interest to produce rebars, which production was nil since quite some time.
It seems that, the wire rod prices may find stability in Raipur & Durgapur as it is in balancing mode analysing to falling productions amid subdued demand.
Offers of large scale mills
Following the significant drop in offers by mid sized mills, the large scale mills being have reduced prices and the current trade reference prices registered at around INR 38,500-39,000/MT ex-Jharkhand & ex-Chennai, size 5.5-6.0 mm & blast furnace grade (SAE 1008).
In exports, these mills didn’t receiving much response from global buyers and the last offers through the buyers end in Nepal reported at around USD 515-520/MT ex-mill, eastern India and freight to Nepal is reported at around USD 15-20/MT CFR Raxaul/Jogbani border.
Meanwhile RINL’s (Vizag Steel) export tender of billet & wire rod to Nepal has expired yesterday (i.e. 19 Jul’19). Market participants are waiting the response to get a clear market direction on export price range of large scale mills. The tenders results are expected to be out in coming week.
Leave a Reply