Local Indian traded rebar prices of secondary steel mills have surged over the past week reacting to the acute shortage of coal supplies across the country, risks of a fall in power generation and forced production cuts, SteelOrbis learned from trade and industry circles on Tuesday, October 12.
Indian rebar prices of secondary mills are up by an average of INR 2000/mt ($27/mt) to INR 51,700-53,500/mt ($686-710/mt) ex-Mumbai. It was pointed out that secondary mills are more dependent on coal and electricity for operations and mills are facing risks of reducing plant operations further owing to shortage of dry fuel, and that trading prices have been surging in reaction.
Integrated steel mills which somewhat insulated by either captive coal mines or higher capacity to carry large coal stocks have maintained prices at INR 56,000-57,000/mt ($743-756/mt) ex-works, while officials said that there are no risks of forced production cuts, but rising input costs would need to be passed on to consumers through further base prices increases later in the month.
“The cost push is driving prices. In the absence of a demand uptick, this is a negative for overall market development. The coal shortage has added uncertainty at a time when recovery of demand from key industries has been slower than expected,” an official at an eastern Indian secondary rebar producer said.
“The price increase is to compensate for higher input costs. Margins for secondary mills continue to remain under pressure. Improving sentiments among induction furnace operators noticed a few weeks earlier have been negated by the coal crisis,” he said.
$1= INR 75.40