Indian rebar prices stable due to expected demand revival at end of rainy season

Tuesday, 17 September 2019 11:44:03 (GMT+3)   |   Kolkata
       

Local Indian rebar prices have remained stable during the past week with large producers deciding to maintain base prices unchanged for September deliveries and with discounts being pulled back in anticipation of a demand pick-up with the rainy monsoon season abating and given the expected improvement in bookings from the construction sector, traders said on Tuesday, September 17.

The traders said that the export market has showed little activity during the past week and no significant contracts by any of the large steel mills have been reported in the market.

Large steel mills have maintained prices at INR 32,000/mt ($446/mt) ex-stockyard but discounts on offer ranging at about INR 400/mt ($6/mt) have been pulled back amid the slight improvement in trading volumes, market sources said. Small and medium-scale rebar producers have also maintained their prices, at INR 32,200/mt ($448/mt) ex-stockyard.

“There has been stability in the market although with prices at a near two-year low. The positive is that the rapid fall in rebar prices seems to have been checked in anticipation of a pick-up in construction activity starting in October, now that the monsoon rains will start to withdraw,” a Kolkata-based trader said.

“Pig iron prices have also remained stable and this has helped both integrated and non-integrated rebar producers to maintain prices,” the trader added.

However, according to an official at Shyam Steel, eastern India’s largest rebar producer, questions still remain regarding a revival of demand from the construction sector. He said that, while the rainy season does lead to a slowdown in construction activity and hence in raw material bookings, most construction, particularly in the housing sector, had slowed down more from a shortage of liquidity faced by builders and availability of funds from lending institutions is still acute and hence the demand revival will remain muted in the medium term.

$1 = INR 71.81


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