India: BF-route rebar trade prices drop INR 800/t ($10/t) w-o-w as slow demand weighs down market

Trade prices of thermo-mechanically treated re-inforcement bars (rebar) manufactured through the blast furnace-basic oxygen furnace (BF-BOF) route have recorded a drop of INR 800/t ($10/t) w-o-w in the key Mumbai market. Prices have declined for the sixth consecutive week amid subdued demand in major domestic locations. 

Current rebar prices are at INR 60,800/t ($737/t) exy-Mumbai, as per SteelMint assessment on 17 March. Prices exclude 18% GST.

Factors driving rebar offers:

1. BF-IF-route rebar price gap narrows: The IF-route rebar trade prices have shown mixed trends across major markets due to weak demand and sellers on wait-and-watch mode. Weekly average trade prices of IF-route rebar remained rangebound at INR 56,550/t ($686/t) exw-Mumbai against INR 56,400/t ($684/t) last week. IF rebar enjoys a domestic market share of around 65-70%, as per SteelMint assessment.

The gap between BF-IF route rebar has narrowed to some extent to INR 5,600/t ($68/t) in March as against INR 6,100/t ($74/t) in February.

2. Iron ore prices stable, coking coal down: Prices of iron ore fines remained unchanged while coking coal prices declined over the last few days. Prices of iron ore fines (Fe-63%) remained largely stable since the beginning of this month. Prices have remained stable on a weekly basis at INR 6,000/t ($73/t) ex-mines as on 11 March.

SteelMint's weekly Odisha iron ore fines Fe 63% index rose by INR 250/t ($3/t) to INR 6,000/t ($73/t) ex-mines as on 11 March as against INR 5,750/t ($70/t) in the first week of February.

Australian premium hard coking coal (HCC) prices dropped $28/t to $357/t CNF India on 17 March compared with $385/t on 10 March. The decline has been due to low buying interest as most end-users have actively restocked over the past two weeks. Indian buyers are on the sidelines as they expect prices to correct further.

3. Subdued demand from projects: Demand for BF-route rebar has remained slow since the beginning of February, with market participants resorting to destocking to offload inventory, which has weighed on the trade prices. This scenario has continued with buying interest remaining low before and after Holi. Also, buyers are currently struggling with higher interest rates and participants in the distribution network are facing challenges relating to delay in credit collection, sources informed.

Meanwhile, ahead of the fiscal year-end, demand from the projects segment has remained subdued and current offers from the primary players are at around INR 60,000-61,000/t ($727-739/t) FOR Mumbai as against INR 64,000/t levels in mid-February.