The daily Davis Index for rebar Monday decreased by Rs500/mt ($6.64/mt) from Friday and settled at Rs35,200/mt (467.46/mt) ex-works Raipur producer on account of thin trades at higher prices.
Most steel mills in Central and East India have restarted production and are increasing their capacity utilization. Mills are yet to reach pre-lockdown levels of around 70-80pc capacity. The steady uptick in steel production may increase the supply of finished steel products which could push steel prices down in the near term. With the onset of monsoon, construction activities are also expected to slow down and reduce steel demand.
On the contrary, international iron ore prices crossed $100/mt cfr China, up by $15-20/mt in May amid supply concerns from Brazilian miners Vale and robust demand from China. This trends could support finished steel prices.
The index for billet Monday rose by Rs200/mt ($2.65/mt) from Friday and settled at Rs29,300/mt ($389.11/mt) ex-works Raipur due to limited availability of material due to bulk exports. Pellet sponge iron was priced at Rs16,500/mt ex-works Raipur, up by Rs200/mt from the prior day.
In Mumbai, the daily Davis Index for rebar remained unchanged at Rs34,300/mt (455.51/mt) ex-works with little trade. The daily index for billet was up Rs200/mt to Rs29,700/mt ($394.42/mt) ex-works Mumbai with the increase in imported ferrous scrap offers.
In Mandi Gobindgarh, the daily index for ingot also rose by Rs250/mt to Rs31,450/mt ($417.66/mt) ex-works on a similar rise in ferrous scrap prices.