Prices for semi-finished steel in most Indian markets continued to be under pressure as resurgence of COVID-19 pandemic has instilled a fear economic slowdown.
The daily Davis Index for billet in Raipur slipped by Rs300/mt ($3.99/mt) to Rs40,400/mt ($537.58/mt) ex-works on Wednesday. Most buyers have adopted a ‘just-in-time’ inventory strategy to avoid losses in a weak market. The index for rebar was unchanged at Rs44,800/mt ex-works. Steel retail shops are to remain shut till April 19 amid a state-wide lockdown.
The Indian government has asked industries to divert their oxygen supplies for medical emergencies. Mills have been forced to cut production because of a shortage of oxygen cylinder and lack of steel demand. Mills, however, believe that once the COVID-19 wave is controlled, demand could surge giving prices a lift.
Offers for pellet Sponge iron were unchanged at 29,500/mt ex-works Raipur.
In Mumbai, the index for billet rose by Rs200/mt to Rs41,700/mt ex-works. The index for rebar fell by Rs100/mt to Rs47,800/mt ex -works. The government of Maharashtra has tightened restrictions starting April 14, 8pm until April 30. According to new rules, construction activities can continue only if builders can arrange to house laborers at the development site. This could slow the pace of projects in the state, thus pulling down demand for rebar.
In Mandi Gobindgarh, the index for ingot fell by Rs400/mt to Rs42,900/mt ex-works amid decreased trading. With a dip in economic activities, payment cycles have been delayed with most re-rolling mills receiving payments three-four months later than scheduled, forcing them to reduce ingot purchases.
($1=Rs75.15)