Indian rebar prices up on government funding for housing, doubts persist over sustainability

Tuesday, 12 November 2019 14:34:31 (GMT+3)   |   Kolkata
       

Local Indian rebar prices continued to consolidate at higher levels in the past week with producers pushing up prices prompted by government moves to bail out a section of the construction industry, and amid anticipation of higher rebar demand, SteelOrbis has learned.

The traders said that rebar demand is expected to revive following the government move to set up a specific $3.52 billion fund to offer fresh finance to incomplete real estate housing projects across the country and which is expected to get back on track at least 1,500 stalled housing projects.

Reacting to the government move during the past week, small and medium-scale rebar producers increased prices by INR 500/mt ($7/mt) to INR 33,000/mt ($462/mt) ex-stockyard. Large producers increased prices by INR 350/mt ($5/mt) to INR 34,000/mt ($476/mt) ex-stockyard.

However, some market participants and producers are cautious, expressing doubts over the sustainability of the current uptrend in the rebar market. They said that, with most macro indicators showing sharp negatives, it is unlikely that just a sectoral palliative like funding of stalled housing projects will stabilize prices in the medium and long term.

The traders pointed out that the Index of Industrial Production (IIP) declined 4.3 percent during September 2019, the sharpest fall over the last eight years, while electricity generation, a key indicator of economic growth was down 2.6 percent during the month, adding that these showed up deeper structural problems which would continue to prevent prices from sustaining consolidation at higher levels.

“There has definitely been an improvement in sentiments. But not in the case of fundamentals which alone can ensure sustainability of prices,” a manager at Rashtriya Ispat Nigam Limited (RINL) said.

“The government funding announced last week will partially improve housing demand, which is just a part of the larger construction sector. There is no visible sign of increased purchases by large government infrastructure projects, the mainstay of large integrated steel mills which rely heavily on governmental procurement,” he added.

$1 = INR 71.50


Similar articles

Import longs offers in Romania now attractive, local prices stable

28 Mar | Longs and Billet

Turkish domestic dollar-based rebar spot prices soften

28 Mar | Longs and Billet

Major steel and raw material futures prices in China - March 28, 2024

28 Mar | Longs and Billet

Rebar consumption in Mexico decreases 3.1 percent in January

27 Mar | Steel News

US rebar prices mostly stable with occasional deals

27 Mar | Longs and Billet

Downtrend reverses in Pakistan’s import scrap segment

27 Mar | Scrap & Raw Materials

Turkey seeks to raise rebar export offers, demand mostly seen locally

27 Mar | Longs and Billet

Iskenderun-based Turkish mill increases its rebar price      

27 Mar | Longs and Billet

Major steel and raw material futures prices in China - March 27, 2024

27 Mar | Longs and Billet

US import rebar market remains quiet

26 Mar | Longs and Billet