Local Indian rebar prices have witnessed a sharp surge over the past week with both integrated steel mills and secondary producers effecting one of the highest price hikes in recent years, claiming high costs, together with a shortage of raw materials and a demand revival leading to short supplies in key regional markets in the west and south, SteelOrbis has learned.
Sources said that for the second consecutive week integrated steel mills have increased prices - this time by INR 3,000/mt ($41/mt) to INR 46,500-47,000/mt ($633-640/mt) ex-stockyard. The sources said that in select regional markets the price of high grade branded rebar from integrated steel mills were being quoted at around INR 50,000/mt ($680/mt) ex-stockyard after a premium as large projects were failing to book the needed higher volumes.
Secondary steel mills have increased prices by INR 2,000/mt ($27/mt) for the second consecutive week to around INR 40,000/mt ($554/mt) ex-stockyard, with reports assessed by SteelOrbis from regional markets in the west around Mumbai indicating the effective tradeable price to be around INR 42,000/mt ($571/mt) ex-stockyard for deliveries of relatively higher volumes.
“There is a lot of pressure from the government on checking construction grade steel products. But producers have no option but to increase rebar prices as iron ore prices have doubled since June 2020,” an official from eastern India’s largest rebar producer said.
“Demand is strong with construction activities reviving after the monsoon season. Realty developers are also restarting projects, leading to an uptick in bookings received by secondary producers. But rebar prices are rising too fast and it can be counterproductive as project cost escalations will risk lower raw material offtake in a market where everyone is facing liquidity challenges. But rebar producers are caught in a bind of rising raw material costs, and the government instead of seeking to intervene in pricing should take measures to ease raw material pressures by banning iron ore exports,” he added.
An official from Jindal Steel and Power Limited said that October-March is a traditional period for high construction activities during the year and higher prices would be absorbed by the market, but did not comment on government minister Nitin Gadkari’s allegations that steel and cement producers were cartelizing to push up prices, leading to an escalation of costs for government-funded infrastructure projects.
$1 = INR 73.50