The downtrend in the local Indian rebar market has gained momentum over the past week, with retail trade activity declining significantly, while large buyers including engineering, procurement, construction (EPC) companies have continued to be absent with rains spreading across the country signalling the onset of the monsoon and lean season period ahead for construction activities and resultant demand, SteelOrbis learned from trade and industry circle on Tuesday, May 27.
Sources said that rebar trade prices have lost INR 800/mt ($9/mt) to INR 47,000/mt ($551/mt) ex-Mumbai and are down INR 500/mt ($6/mt) to INR 47,500/mt ($557/mt) ex-Chennai in the south.
Rebar trade prices have lost INR 400/mt ($5/mt) to INR 43,100/mt ($505/mt) ex-Raipur and have moved down INR 800/mt ($9/mt) to INR 41,800/mt ($490/mt) ex-Durgapur in the east.
The sources said that large buyers including EPC companies have continued to refrain from bookings from large mills, resulting in a fall in trade volumes. At the same time, movement of stocks in retail has also showed a slowdown with real estate developers and urban infrastructure companies not restocking ahead of the usual fall in pace in contract implementation during the monsoon season.
In reaction to this situation, induction furnace operators are heard to be extending various sops in the form of extended credit periods beyond 30 days and discounts based on volumes, but according to market intermediaries these measures have failed to have any desired impact.
“The decline in prices is getting sharper as demand had already been weak and will get worse with the onset of monsoon rains. Flooding is reported from western and southern regions. Induction furnace operators are under increasing pressure to liquidate inventories,” a Kolkata-based distributor said.
“The market will face further downside risks as monsoon seasons spreads across the country. With inventories rising, sales will only be concluded on extended discounts or credit or a combination of both,” he added.
$1 = INR 85.29