Local Indian rebar prices remained stable during the past week but concerns mounted on rising fears in disruptions of the supply chain, distribution and rural projects.
According to the traders, while both integrated steel mill and secondary rebar producers maintained prices, trading activity faced a downturn as the country recording fastest growth in virus affected cases in the world started to impact revival seen earlier particularly in rural economies and construction agencies staying away from fresh bookings of raw materials.
Market sources said that integrated steel mills kept rebar prices unchanged at INR 35,700/mt ($476/mt) ex-stockyard, while rebar prices of secondary steel mills too remained stable at INR 29,400/mt ($392/mt) ex-stockyard.
According to a steel sector analyst at a Mumbai financial advisory firm, rebar producers do not have much leeway in using pricing strategy to push volumes in the market.
He said that divergent trends had emerged in the domestic steel market with flat products seeing an uptrend both in terms of demand as well as prices leading to tightening of supplies. However in contrast, long products like rebar remains sluggish with prices under pressures and even greenshoot to demand revival nipped in the bud. He added that this was possible because of flat product end use industries were comparatively less manpower dependant that rebar user industries like construction which was heavily labor intensive and more susceptible to disruptions of regional lockdowns and impact of pandemic.
At least two traders and analysts said that rebar prices of secondary steel sector have already hit a floor with little room for further adjustments to trigger volume booking particularly against backdrop of high imported price of scrap. At the same time, merchant sale price of billets too are surging with billet producers increasing prices to ride export boom and offset iron ore prices which have increased 35 percent since April.
Exchange rate: $1= INR 74.90