The diverging fortunes between large and smaller rebar producers further accentuated over the past week in India with integrated steel mills maintaining prices amid reports of possible base price increase next month, while secondary mills prices softened even as capacity utilization continued to fall, SteelOrbis learned from trade and industry circles on Tuesday, August 24.
Large integrated steel mills maintained rebar prices at INR 54,500-55,000/mt ($734-740/mt) ex-works with at least two mills including Tata Steel has provided indication of assessing the market to increase base prices of long products in September.
The sources said that market expectation was that integrated mills could consider pushing up rebar prices by INR 1,000-1,500/mt ($13-20/mt) next month.
In contrast, rebar prices of induction arc furnaces based suppliers softened by INR 500/mt ($7/mt) to INR 52,500/mt ($706/mt) ex-works. Tradable price in central regional market was heard at around INR 52,500/mt ($706/mt) ex-Raipur compared to INR 53,000/mt ($713/mt) a week ago, while prices around the Kolkata market in the east was heard at INR 53,500/mt ($719/mt), down from INR 54,000/mt ($727/mt) a week ago.
According to industry sources, average capacity utilizations of secondary mills continued to languish at lower level of not more than 50-60 percent as operators were inclined to maintain lower production to keep variable costs in check in view of soft rebar prices which continued to squeeze margins from conversion of higher priced billets to rebar.
“Large steel mills are able to leverage rebar demand for large projects against tender procurement better than secondary mills reliant on retail sales. The biggest problem is large volumes of stocks lying at our warehouses. In falling retail market we are selling at whatever price we get,” a north India based steel distributor said.
“There is delayed monsoon rains in large parts of northern India which are delaying resumption of construction activities in real estate development and buyers deferring new bookings putting further pressures on our inventories,” he added.
$1= INR 74.34