After an extended bullish run, the local Indian rebar market has entered a correction phase over the past week with prices slipping down as users have become cautious over high prices and trade channel - mostly sufficiently stocked - have deferred fresh bookings, SteelOrbis learned from trade and industry circles on Tuesday, January 10.
Despite a slight weakening in prices, market participants and distributors do not see this as a cause for concern or significant further downside risks. They said that the market was “just taking pause” before the next uptrend expected to be triggered by the national budget scheduled for presentation before parliament next month and indications from the government to significantly increase infrastructure capital outlays.
Sources said that rebar prices have edged down INR 400/mt ($5/mt) to INR 55,800/mt ($677/mt) ex-Mumbai and are unchanged at INR 52,700/mt ($640/mt) ex-Chennai in the south.
Rebar prices have lost INR 800/mt ($10/mt ) to INR 50,900/mt ($618/mt) ex-Raipur in central region and are down INR 600/mt ($7/mt) to INR 51,100/mt ($620/mt) ex-Durgapur in the east.
“There is some buyer resistance as prices have moved up too fast. Retail trade has slowed down as buyers are staying away from high prices and are expecting them to fall further. But the correction that has set in will be short-lived as the outlook from infrastructure and construction remains robust on the back of government spending,” a Kolkata-based distributor said.
“Producers are also unlikely to make changes in prices in a kneejerk reaction to the downtrend seen over the past few days. Take the case of cement, which is seeing historical high prices, and so both steel and cement being linked in demand can be expected to move in tandem,” he said.
$1 = INR 82.40