In a move catching the market by surprise, Indian integrated and secondary steel mills have cut their rebar prices slightly, thereby softening tradable prices too by passing on the benefits of lower input prices of billet and scrap, and driving higher volumes into the market, SteelOrbis has learned from trade and industry circles on Tuesday, March 23.
The sources said that producers have possibly been attempting to support trading volumes in the market amid the new wave of the pandemic that will trigger more uncertainties and caution among key segments like construction, while the more attractive prices would enable sustained buying.
According to market sources, integrated steel mills have lowered base prices by around INR 500/mt ($7/mt) to INR 48,500/mt ($670/mt) ex-works, taking the tradable price to around INR 51,750/mt ($715/mt) ex-Mumbai, compared to levels of around INR 52,250/mt ($722/mt) ex-Mumbai a week ago.
Secondary steel mills have pruned prices by INR 1,000/mt ($14/mt) to around INR 48,000/mt ($663/mt) ex-works, sources said.
“Producers, both primary and secondary, are attempting to stay ahead of an uncertain demand curve by quickly passing on the benefits of the slight softening of input costs to rebar end-users to sustain demand and avoid inventory buildups. The surge in price seen early in the month was not sustainable as several buyers were already panicking over the second wave of the pandemic and local authorities imposing regional restrictions on the movement of people,” an official at Shyam Steel, eastern India’s largest rebar producer, said.
“The market is becoming very price sensitive because of uncertain extraneous factors like the rising cases of pandemic, vaccine roll-outs, and the revival of construction activities limited to Tier I cities and towns only. Sellers have therefore to be more aggressive in pushing volumes in the market and not risking unsustainable price levels. Much will, however, depend on what the new bottom of input prices like billet and scrap will be,” he added.
$1 = INR 72.40
