BigMint's India steel index edges down w-o-w on rising inventories, softening trade sentiment

• BF rebar trade prices drop $15/t w-o-w
  
  
• Flat steel prices weaken on subdued enquiries
  
  
• HRC export index to EU falls by $10/t w-o-w
  
  

Morning Brief: BigMint's India steel composite index, a barometer of the domestic steel market, edged down by 0.9% w-o-w as domestic prices weakened on inventory buildup and soft demand, with geopolitical tensions subsiding somewhat. Although the inflationary impact of the crisis in the Middle East still casts its shadow over the domestic market, enquiries remained subdued last week due to elevated prices and weakness in certain key downstream sectors such as construction.

Steelmaking raw material prices, too, remained stable w-o-w. While the flats index fell by just 0.3%, broadly indicating stability in prices, the longs composite index edged down by 1.5%, with rebar correcting sharply by over 2% w-o-w.

Highlights of price movements

Rebar prices weaken across routes: Trade-level BF rebar prices declined by INR 1,500/t ($15/t) w-o-w to INR 57,500/t ($600/t) exy-Mumbai. Demand remained average across major regions, while northern India continued to witness weaker buying interest, according to sources. Higher inventory availability with distributors kept procurement cautious at prevailing prices, resulting in a mixed sentiment during the week.

IF rebar prices declined across major markets last week due to weak demand, slower construction activity, and cautious buying sentiment. Mills reduced offers and provided discounts to boost sales and clear rising inventories, which reached 10-12 days by early May.

The BF to IF rebar price spread in Mumbai was at INR 10,000/t ($104/t) last week. IF rebar continues to dominate the market with a 65-70% share.

BigMint's bi-weekly benchmark assessment for HRC (IS2062, Gr E250, 2.58 mm/CTL) remained stable w-o-w at INR 58,700/t as of 15 May. CRC (IS513, Gr O, 0.9 mm/CTL) prices were assessed at INR 65,500/t, stable w-o-w.

Flat steel market sentiment muted: Trade-level prices of HRC and CRC remained subdued last week as buyers stayed on the sidelines, showing little inclination to procure. Adding to the downward pressure, sellers in select markets reduced their offers, contributing to a further easing of prices.

Weak demand persisted across regions, capping any meaningful upside in prices. Transaction activity remained muted, with buyers showing no urgency to lift volumes beyond their immediate requirements. A market participant informed BigMint, "The mood across the supply chain is one of wait-and-watch, with neither buyers nor sellers showing much appetite for deals."

HRC export prices edge down w-o-w: Export BigMint's India HRC export index to the EU declined by $10/t w-o-w to around $700/t CFR Antwerp last week. HRC export activity remained subdued with shipments to Europe and the Middle East constrained by regulatory uncertainty, logistical disruptions, and persistent geopolitical tensions.

In the EU, although offers declined w-o-w, no bookings were reported as buyers remained cautious amid concerns over country-wise quota allocations under upcoming safeguard revisions, alongside CBAM-related compliance costs. Meanwhile, in the Middle East, geopolitical tensions disrupted cargo movement.

Outlook

The impasse in the Middle East continues to simmer and can emerge as a key factor if tensions re-escalate. However, the rally triggered in the domestic steel market by the Iran crisis is definitively over.

In the longs segment, rising inventories and widening BF-IF rebar spread are expected to keep prices under pressure this week, although a marginal improvement in construction sentiment may be expected. Flat steel prices, on the other hand, may remain under pressure due to shrinking spread with landed imports, weak domestic enquiries and muted export sentiments.

We believe prices are likely to remain subdued this week despite anticipation of the initiation of pre-monsoon restocking.