Local Indian rebar prices have been maintained unchanged during the past week by both primary and secondary steel mills amid continuously thinning trading activity and worsening relations between sellers and buyers, with a large segment of the latter commencing protests against rising prices, SteelOrbis has learned from trade and industry circles on Tuesday, February 16.
The sources said that virtually every pan-India representative body of real estate developers - the Builders Association of India (BAI), the Confederation of Real Estate Developers’ Association of India (Credai) and the Estate Developers’ Association of India - are launching country-wide protests against high steel prices, including a one-day strike at all construction sites across the country, and are promising to step up their agitation unless steel prices are reined in.
Under such an uprising by key consumer segments, trading activity and fresh bookings for rebar have suffered major setbacks, and the issue of pricing snowballing into a major political controversy makes government intervention imminent, traders and industry circles said.
Key members in associations of builders said that, with steel prices rising by 25-30 percent over the past four to five months and steel and cement accounting for 70 percent of total housing construction costs, builders are not only stretched in their available liquidity to restock raw materials, but the demand revival for housing and buildings is also being jeopardized since higher construction costs would ultimately have to be borne by end-buyers.
However, officials at primary and secondary steel mills have said that current prices are a “reflection of current demand-supply dynamics” and producers for their part do not have any leeway to roll back prices in view of rising input costs, adding that steel mills are merely balancing demand by maintaining their reasonable rate of returns on investments.
Sources said that integrated steel mills have maintained rebar prices at around INR 48,500-49,000/mt ($667-674/mt) ex-works, after marginally reducing base prices in the previous week. Secondary steel mills have also maintained base prices unchanged, at INR 47,000/mt ($646/mt) ex-works. With large construction companies preferring to either defer bookings or limit volumes, the premiums seen in the market until a month ago have largely disappeared.
$1 = INR 72.70