The extended downtrend in the local Indian rebar market has been reversed with prices recording modest gains even though pessimism over the upside potential persists, SteelOrbis learned from trade and industry circles on Tuesday, November 30.
Gains in prices across regional markets have been reported in the range of INR 500-750/mt ($7-10/mt) amid a revival in fresh bookings received by secondary steel mills and a rise in retail sales.
However, several market participants have been cautious over terming the gains as a reversal of the prolonged bear phase seen in long steel products and said that the price increase was too modest and at best would result in lower discounting in the market rather than significant gains in net margin realizations of secondary mills.
Sources said that rebar prices have edged up INR 750/mt($10/mt) to INR 50,250-51,250/mt ($671-684/mt) ex-Mumbai. The gains were more modest in the central regional market around Raipur, where prices are up INR 500/mt ($7/mt) to INR 46,800/mt ($625/mt) ex-warehouse.
However, integrated mills kept high base prices unchanged at INR 58,000-60,000/mt ($774-801/mt) ex-works, but bulk discounts are heard to have increased to an average of INR 5000/mt ($67/mt) from INR 4,000/mt over the past week with reports that mills would go in for aggressive base price revisions reacting to a sharp rise in November inventories of long products.
“Positive cues are the emergence of bookings from large government-funded projects. Retail sales improvement indicates real estate developers are increasing activity. But the hardening of prices has to be sustained over at least a quarter to expect the downcycle to have run its course,” a source at Rashtriya Ispat Nigam Limited (RINL) said.
“If input costs trend lower, sentiments among secondary furnace operators will improve. Right now marginal price increases will lead to a commensurate withdrawal of discounts to push volumes in the market,” the source said.
$1 = INR 74.90