Secondary mills based in central and eastern India have begun production of wire rod in last few months and few other have ramped up their existing capacities.
Specifically in central India, a couple of manufacturers have commenced the production of wire rod. The average capacity of each plant set up for the production of wire rod is about 1.5-2 lakh MT pa, equivalent to 500-700 MT/day. Drolia Electrosteels in Raipur and Singhal Steels in Raigarh have already started production since more than a month, as reported by market sources.
Also, Aarti Steel in central India, is set to commence production of wire rod in coming couple of months, as mentioned by sources.
In addition, in eastern India one of the renowned producers, Shyam Group has also expanded their wire rod production and the fresh expansion is about 700 MT in each plant on a daily basis located in Odisha & West Bengal, however it is currently producing about 500-600 MT, each plant. This will add on merchant supply in the market to 1,000-1,200 MT/day by Shyam Group.
Inline with this, there are another 2-3 mills in central India, which are set to start making wire rod and sell it to the merchant market. As per sources, the production capacity of each of these plants would be about 500-700 MT per day, equivalent to 1.5 to 2 lakh MT pa.
As per analysis, in the last 2 months the add on wire rod capacity/supply in merchant market was about 2,500-3,000 MT/day, equivalent to 8-9 lakh MT pa, in which Central & Eastern India accounted about 50-50%.
Followed by the improved supply of wire rod amid average demand, the offers through the secondary mills are under pressure and currently hovering at INR 32,700-32,900/MT ex-Raipur & INR 33,300-33,500/MT ex-Durgapur, excluding of 18% GST & loading extra.
Out of total wire rod production in India, secondary (mid scale) mills contribute about 55-60%, while the rest is produced by large scale mills through blast furnace billet.
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