The local Indian rebar market has continued on a prolonged downward spiral with prices suffering losses amid a convergence of several negatives including the forecast of poor monsoon rains impacting rural income and construction activities, inflationary pressures, liquidity shortages faced by market participants, combined with political uncertainties due to state-level elections in the coming months, SteelOrbis has learned from trade and industry circles.
With most macro and micro indictors becoming more negative and political uncertainties forcing users and trade channels to slow down, rebar trade prices have lost INR 100/mt ($1/mt) to INR 54,300/mt ($661/mt) ex-Mumbai, but have lost ground rapidly by INR 800/mt ($10/mt) to INR 53,000/mt ($645/mt) ex-Chennai.
Rebar prices have slumped INR 800/mt ($10/mt) to INR 49,100/mt ($597/mt) ex-Raipur in the central regional market and are down INR 900/mt ($11/mt) to INR 49,400/mt ($601/mt) ex-Durgapur in the east.
“The mood, sentiments and trading conditions are all negative and worsening week on week. Economic and political uncertainties are all against any possibility of a recovery,” a Kolkata-based distributor said.
“Neither users nor traders have any kind of confidence of increasing exposure in the market. Trade channels are reporting that a lot of funds are locked up against credit sales. The downturn can only get worse as the poor monsoon season approaches. Not only construction activity will fall during the rainy season, also the poor crop harvest will lower rural income. Hence, a post-monsoon recovery too is questionable,” he said.
According to an official at Shyam Steel, eastern India’s largest rebar producer, secondary mills are facing negative margins from rising costs owing to inflation and having to cut prices to keep pushing sales, and economic viability has been severely eroded by prolonged bearish market conditions.
$1 = INR 82.20