Local Indian rebar prices of both primary and secondary producers remained unchanged even as monsoon season induced sluggish conditions lapsed further into inactivity on expectations that sellers would cut prices in the coming weeks to trigger demand uptick, SteelOrbis learned from trade and industry circles on Tuesday, July 20.
Large section of the market felt that in order to revive demand in post-monsoon season months, producers could pass on benefits of slight softening of iron ore prices though marginal cuts in rebar prices.
The sources said that while integrated steel mills had gone in for sharper price corrections in case of flat products, similar price adjustments in case of long products have so far been more conservative. Mills will need to go in for deeper price adjustments to support construction activities gain momentum in tandem with receding rainy season in next quarter.
Sources said that integrated steel mills maintained rebar price at INR 53,500-54,000/mt ($715-721/mt) ex-works with tradable price heard at par in key regions like the Mumbai market.
Secondary mills maintained rebar prices at around INR 52,000/mt ($695/mt) ex-works even as reports of discounts of around 2-3 percent continued to be reported from regional markets in southern and central India.
“Discounted sales have become completely unviable and unsustainable in the retail market. It is being continued solely to sustain cash flows and not for positive margin realizations,” an official with eastern India’s largest rebar producer said.
“There is little leeway to reduce prices further. If any further price cuts can be effected, it can only be after there is a significant rise in volume buying so that producers like us can compensate lower margins through higher volume sales,” he added.
$1= INR 74.87
