Local Indian rebar prices have surged during the past week, with both integrated and secondary steel mills increasing prices, citing a rise in input costs such as prices of iron ore, but at the same time acknowledging the risks of falling bookings and demand, sources told SteelOrbis on Tuesday, November 24.
Rebar producers have increased prices by about INR 1,000/mt ($13/mt) taking the effective prices of integrated steel mills to INR 39,450/mt ($532/mt) ex-stockyard, while the effective price of secondary steel mills has moved up to a range of around 33,200/mt ($452/mt) ex-stockyard, market sources said.
All producers said that rebar price hikes had become inevitable despite a sustained demand depression owing to the shortage of availability of iron ore, coupled with an increase in prices. Several producers reported that, while iron ore from state-run miner NMDC has increased 11 percent during November, most private sector commercial miners in the largest producing state of Odisha have revised prices up by 15-20 percent during the current month and even then sufficient volumes have not been available.
Increasing rebar prices, producers were seen to be acknowledging that high rebar prices would actually be counter-productive to sellers as buyers would be forced to bring down bookings and the cost push on infrastructure projects would slow down attempts to revive overall construction and key consuming sectors.
They pointed out that the landed cost of rebar at the buyers’ end inclusive of taxes, freight and other levies had come close to the INR 50,000/mt ($675/mt) mark over the past two months, which would prove a strong headwind to reviving demand.
“With costs of rebar at INR 50,000/mt, there will be no buyers of iron and steel products and projects will be halted,” Lalit Beriwal, managing director of Shyam Steel, eastern India’s largest rebar producer, said.
$1 = INR 74.10