Indian integrated steel mills have increased long steel prices by INR 2,000-3,000/mt ($27-40/mt), widening the traded rebar price differential with secondary steel mills with the latter maintaining their prices at least for now, SteelOrbis learned from trade and industry circles on Tuesday, November 2.
With latest round of price revisions, base rebar prices of integrated mills stand at levels of INR 58,000-60,000/mt ($774-801/mt) ex-works but bookings, according to traders, were still being received at INR 56,000-58,000/mt($748-774/mt), ex-Mumbai.
Officials at mills said that rising input costs including the surge in energy prices have forced producers to increase long product prices despite the sluggish trade environment. Even with the latest price increase, realizations need to move up by at least another $50-80/mt to fully offset the higher cost of production.
However, traded retail prices of secondary mills have been maintained at INR 51,400-53,200/mt ($686-710/mt) ex-Mumbai.
A secondary mill operator, however, pointed out the usual lag period between price revisions of integrated mills and secondary producers, claiming that the latter too will be forced to revise their rebar prices by at least INR 2,000/mt ($27/mt) over the coming week as the impact of the rise in energy costs is higher in the case of secondary mills without captive power plants, captive coal mines, and with a higher dependency on grid-sourced power.
“We are looking at the new prices announced by large integrated steel mills and the impact on the market before fixing our own price revisions,” a source at Shyam Steel Limited, eastern India’s largest rebar producer, said.
“The retail market is much more sensitive to price changes than project supplies. But increasing our prices is inevitable. The issue is when and by how much. These will differ based on location and mill size,” the source said.
$1= INR 74.90