Local Indian rebar prices have firmed up during the past week on the back of the marginal base price increases by large producers and revived demand from large government-funded infrastructure projects, SteelOrbis learned on Tuesday, December 10.
Market sources said that large rebar producers have increased base prices by INR 600/mt ($8/mt) to INR 34,200/mt ($481/mt) ex-stockyard. In response, rebar produced by small and medium-scale manufacturers are also up by INR 300/mt ($4/mt) to INR 32,400/mt ($456/mt) ex-stockyard.
The sources said that some of the large producers reported a fall in aggregate inventories in the September-November period, enabling them to attempt to push up prices. A revival in fresh purchases by government-funded projects is also supporting higher prices, the sources said.
“The market expects a revival of rebar demand triggered by fresh large-volume bookings by infrastructure projects like underground urban rail network (Metro) construction. Most of these metro projects under construction in several cities are under private-public partnership and the government has ordered the expediting of the completion of these projects and this is expected to boost rebar demand,” a manager at a western India-based steel mill said.
For example, JSW Limited has set a target of supplying 150,000 mt rebar to various metro projects across the country in the current fiscal year and has already completed bookings of an estimated 85,000 mt, sources said.
“The overall increase in demand for rebar for metro projects will be spread across most large producers. The spin-off will also be felt by small and medium-scale producers from overall improved sentiments and price increases,” a steel mill manager said.
Market sources said that the government pressure to expedite large infrastructure projects is expected to be followed up by further booster measures for the housing construction sector which would trigger support for small and medium-scale rebar producers, largely dependent on retail sales to housing construction.
$1 = INR 71.10