Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian secondary billet and rebar prices maintained an uptrend from October 2020 till first week of January 2021 due to high global scrap and iron ore prices along with healthy demand. However, since last one week, prices are sliding after peaking as buyers are finding those prices unviable. 


In Mumbai, billet and rebar prices rose by Rs9,000/mt ($122.9/mt) and Rs11,500/mt ($157/mt), respectively, since October even after taking into consideration minor price correction witnessed in the last few days. In Raipur, which is a sponge-based market, billet and rebar prices increased by Rs8,500/mt ($116 /mt) and by Rs10,000/mt ($135.8/mt), respectively.


The spread between billet and rebar in Mumbai widened to Rs6,500/mt ($89/mt) on January 19, 2021 from Rs4,000/mt ($55/mt) in September-end last year, due to substantial price rise in rebar over ingot and billet. In Raipur, the spread between billet and rebar in Raipur widened to Rs4,500/mt ($61/mt) from Rs3,000/mt ($41/mt) in the same period.


Industry leaders told Davis Index that Mumbai has emerged as the leading secondary steel market in India after a long time. “We are witnessing excellent rebar demand from construction and infra sectors, which gained momentum after September. Almost all steel mills in Mumbai and Jalna are operating at optimum capacity to keep pace with the demand,” according to a Davis Index source based in Mumbai. “However, rebar demand has become moderate since last few days which is reflecting in finished steel prices as well.”


Iron ore supply constraints

Domestic steelmakers, especially secondary producers, faced severely supply shortage of iron ore in 2020 as only 6-7 mines out of the 19 auctioned mines in Indian state of Odisha could begin operations. Odisha had conducted auction of 19 blocks of iron ore in February-March 2020. The 19 mines used to sell 65-70 mn mt of iron ore to merchant markets in Eastern India. The tight supply lead to skyrocketing iron ore prices which deeply hurt domestic steelmakers.


State-owned company National Mineral Development Corporation’s (NMDC) iron ore prices have doubled since June-end. Iron ore lumps, which was at Rs2,450/mt around June-end, are now priced at Rs5,700/mt. 


Industry leaders believes domestic iron ore prices is at peak level and has less scope to move up in the domestic market even as iron ore production is gradually increasing. NMDC iron ore output and sales increased by 23.32pc and 19.08pc in December 2020, respectively. 


JSW Steel has achieved a major milestone with its iron ore dispatch surpassing 100,000mt on a single day from its newly acquired mines in Odisha. JSW Steel acquired four iron ore mines – Narayanposi, Ganua, Nuagaon and Jajang in the districts of Sundergarh and Keonjhar in Odisha in February 2019 — having known reserves of 1,131 mn mt. The company started mining operations in July despite supply chain disruption due to COVID-19 pandemic.


Indian billet and rebar prices in secondary market:

Particulars (Prices excluding GST)MumbaiRaipur
Oct 1, 2020Jan 19, 2021Oct 1, 2020Jan 19, 2021
Billet      30,200         39,000       29,000         37,400 
Rebar (12mm)      33,700         45,700       30,000         39,000 







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