- Safeguard hopes, slower imports prop up HRCs
- NHAI circular gives sharp push to rebar demand
- Production cut buzz also supports finished prices
Morning Brief: The HRC-rebar reverse spread entered its sixth month in February, 2025, marking a trend that started in September, 2024. However, in February this year, the negative trough eased slightly m-o-m at -INR 4,400/tonne ($51/t) compared to January’s -INR 5,300/t ($61/t). March onwards, prices have shown an upswing and the sentiments were already being felt from end-February itself.
Thus, the negative spread eased in February on the back of the slight recovery in prices of both the benchmark hot rolled coil (HRC) and rebar. For instance, HRC prices rose 3% m-o-m to INR 48,400/t ($556/t) against INR 47,000/t ($540/t) in January, although rebars staged a more negligible turnaround of less than 1% at INR 52,800/t ($606/t) against INR 52,300/t ($600/t) in January.
Factors that impacted the spread in Feb’25
HRC
Tier-1 mills raise list prices amid lesser import pressure: HRC prices fluctuated somewhat last month but remained elevated m-o-m because tier-1 mills hiked their list prices of HRCs and CRCs by INR 1,500-2,000/t ($17-23/t) for February sales, encouraged by the fact that pressure from imports had eased somewhat. India’s bulk HRC imports had dropped off by 35% in January 2025 y-o-y and 14% m-o-m. Imports in January were possibly at their lowest in the current fiscal.
That apart, sellers were upbeat on sales this being the last quarter of the fiscal year and budgets need to be exhausted.
Safeguard duty hopes keep raise prices: The market was upbeat that an announcement on a safeguard duty could happen soon and this sentiment also kept domestic HRC prices supported. With the Trump Administration in the US issuing a 25% tariff on all steel (and aluminium products) across its supplier countries), there are apprehensions that a lot more steel will get dumped into India. Thus, industry players feel a decision on the safeguard duty could be imminent.
Production cuts buzz raises trade-level prices: As the month progressed, trade-level prices spurted by around INR 800/t ($9/t) amid unconfirmed reports of production cuts by tier-1 mills and the ensuing supply tightness that usually follows such initiatives. These production cuts were said to be over and above the shutdowns at JSW Steel’s HSM2 at Vijayanagar works and AM/NS India’s Corex2 plant while one prominent mill was said to be taking almost a month’s shutdown.
Rebar
BF, IF rebar prices rise: Trade-level blast furnace route rebar prices rose by around INR 500/t ($6/t) in the second week, following the INR 500-1,000/t ($6-11/t) hike in tier-1 mills’ list prices for February sales. Earlier, IF-level rebar prices had spiked by INR 200/t ($2/t) due to a cost push from billets and sponge iron and then again by INR 700/t ($8/t) in the following week. Moreover, transaction volumes rose after a few weeks of subdued buying, propelling the price hike and also led to some inventory depletion.
NHAI circular offers support: A key development that supported prices was the NHAI circular that has made quality control a far more stringent affair by replacing the “one-time source approval” system with “a multi-level checks and control mechanism”, and that too, through only NHAI-verified vendors. With the financial year closure approaching, the market has seen a sudden spurt in rebar demand from NHAI-verified vendors, which also helped to shore up prices by another INR 1,500/t ($17/t) in early March.
Supply tightness keeps prices firm: Supply tightness also supported the price hike. The supply crunch was set off by rumours that a leading private sector mill’s BF line would go offline for the rest of the quarter, which would translate into a production shortfall of around 30,000 tonnes per month.
Outlook
BF mills raised rebar prices by INR 2,000/t ($23/t) for early March deliveries compared to February tags, propelled by the NHAI order and year closing. The buzz is that prices may see another couple of hikes in March itself. IF mills may follow suit since they command 65-70% of the market.
HRC prices may also see some increases, buoyed by safeguard duty hopes and a drop in import volumes.
Article From bigmint
