The tenuous uptrend in the local Indian rebar market seen earlier has been reversed during the past week with large, medium-size and small producers adjusting prices downwards, amid uncertainty surrounding any demand revival and the lack of export opportunities, SteelOrbis has learned.
According to the traders, even though banks and lending institutions upon a government directive had stepped up retail lending to housing finance, the response has been lukewarm, and small and medium-size producers’ expectations of higher retail rebar sales have not materialized.
Market sources said that small and medium-scale rebar producers, which had increased prices earlier, have reversed their pricing decision, lowering their prices by INR 750/mt ($10.5/mt) to INR 32,450/mt ($458/mt) ex-stockyard.
At the same time, large branded rebar producers have lowered prices by INR 500/mt ($7/mt) during the past week to INR 32,250/mt ($455/mt) ex-stockyard, the sources said.
“Even with banks increasing liquidity and lending, retail borrowers are completely absent and the much-expected revival in housing finance and hence demand for construction material is unlikely to happen,” a Kolkata-based trader said.
“Significantly, the price differential of rebar produced by large steel mills and mills in the small-to-medium sector has narrowed and is currently at its lowest in the last six months. I see this as demand remaining weak in both retail sales as well as off-take in government-funded and other large construction projects, and this is impacting producers across segments,” the trader added.
“The entire market is expecting that rebar demand will bounce back once the monsoon season is over. But two new negatives have emerged. Untimely rains and floods have hit large parts of north India and the east, and the slowdown in construction will continue for some more months. Even in parts of the country where rains have abated builders and infrastructure project implementers are strapped of funds to resume work on unfinished projects,” the trader said.
Market sources said that no large steel mills have reported any export contracts of rebar during the past week, with buyers in key markets staying away from making fresh bookings.
$1 = INR 70.91