Indian integrated steel mills have increased local rebar prices marginally during the past week for October deliveries, while secondary mills have kept prices unchanged but heavy discounting reflecting rising inventories has resulted in a further widening of prices across regional markets, SteelOrbis learned on Tuesday, October 6.
Integrated steel mills have increased long product prices by INR 500/mt ($7/mt) to around INR 37,450/mt ($511/mt) ex-stockyard, while secondary mills’ prices are unchanged at around INR 30,700/mt ($419/mt) ex-stockyard. Most trade prices are lower than the benchmark base price, showing wide variations across regional markets.
Citing examples of varied trade prices across regions, traders said traded prices ranged at around INR 32,300/mt ($441/mt) ex-stockyard in eastern regional markets around Kolkata/Durgapur, at INR 34,300-35,000/mt ($468-478/mt) ex-stockyard in Mumbai in the west, to a high of INR 37,300/mt ($509/mt) ex-stockyard in the north around Kanpur/Delhi.
“Data on the demand side show wide variances in demand profiles among key user industries. There is some greenshoot revival in demand from housing construction in urban areas. But the initial demand uptick in rural housing has fizzled out. Demand emanating from large infrastructure projects, the key sector for integrated mills, has belied expectations as government funding is not coming in. Such large variables in demand are leading to a fragmentation of regional markets, leading to unorganized fragmented prices in the rebar market,” said an official at Shyam Steel, eastern India’s largest rebar producer.
“We are having to increase our rebar prices to align them with rising input costs like those of iron ore and energy. This will keep operational costs viable. But this is often a challenge on the sales side as sluggish demand and rising inventories force discounted sales to keep inventory costs in check,” an official from Rashtriya Ispat Nigam Limited (RINL), an exclusively long steel product manufacturer told SteelOrbis.
$1 = INR 73.30