Indian local rebar (TMT) market has remained stable during the past week with both large and small and medium scale producers maintaining prices at higher levels in anticipation of demand revival in the construction sector once business activity resumes after the festival holidays, SteelOrbis learned.
Small and medium scale rebar producers have maintained their prices at INR 32,200/mt ($454/mt) ex-stockyard. Large producers have also kept their prices unchanged at higher levels at INR 32,850/mt ($463/mt) ex-stockard.
The traders said that prices have been maintained at higher levels as rebar producers were attempting to pass on the increase recorded in pig iron prices. Local pig iron prices have increased by INR 200/mt ($3/mt) during the past week and both integrated producers and standalone rebar manufacturers were passing on higher input costs in their rebar prices.
At the same time, producers were anticipating a revival in construction activity as the festival season was nearing an end although a section of traders maintained that demand uptick seen in earlier weeks was still very weak and not clear whether such would gain momentum in the coming weeks.
They said that while there has been noticeable improvement in fresh bookings by large government funded projects, retail demand for rebar, the mainstay of small and medium scale producers, was yet to show definite uptrend.
“Rebar prices can go either direction from current levels. Even the mild demand revival is very disparate geographically. Considering that over 60 percent of domestic steel demand comes from the construction sector, unless there is a widespread revival of construction, both project and housing, local rebar prices is most likely to remain range-bound and higher inventories at producers’ end will stay,” an official with Steel Authority of India Limited (SAIL) said.
Small and medium scale producers who depend largely on housing construction activity are still in negative sentiment mood considering that latest available data shows 1.3 million unsold housing stocks across the country and under the circumstances, large real estate developers already strapped of cash are unlikely to take up new projects and preclude any significant sustained upturn in rebar prices and demand, an official with an eastern region based steel mill said.
$1= INR 70.90