Local Indian rebar prices have showed no change during the past week amid thin trading activity and a lack of export opportunities, with the market continuing in a negative zone, SteelOrbis has learned.
According to traders, while the scarce trading was expected and could be temporary owing to the number of holidays that is likely to continue over this week, market sentiments have remained negative for the medium term as the much-expected revival in demand from the construction sector has not materialized and remains uncertain.
The differential between the rebar price of large producers on the one hand and that of small and medium-scale producers on the other has narrowed down to a six-month low indicating that demand from both large construction projects and infrastructure as well as retail demand from individual housing construction has been hit over the past months. Market sources said that small and medium-scale producers of rebar have maintained prices at INR 32,450/mt ($458/mt) ex-stockyard. Large rebar producers have also held prices stable at INR 32,250/mt ($455/mt) ex-stockyard.
The fact that branded rebars from large steel mills are commanding a price lower than those produced by small and medium-scale producers reflects the fact that buyers are not willing to pay a premium for branded products. Also, the slowdown in off-take by large government-funded projects has forced large steel mills which were more dependent on government supplies to price their products lower.
“Exporting steel mills like us are submitting offers in the range of $430-440/mt FOB for high quality earthquake-resistant grade material. But there is just no response from buyers in key markets. With local sales too at a low level managing inventories already at peak levels is a challenge,” an official with Rashtriya Ispat Nigam Limited said.
“The government has made a budgetary allocation of fresh funds to lending institutions so that the latter can lend afresh to unfinished projects. But any demand for rebar from such a move can only be expected with a lag period. But this is the only positive we can expect in current market conditions,” the official added.
$1 = INR 70.85