Close on the heels of large integrated steel mills, Indian secondary rebar producers have hiked prices during the past week, even amid negligible trading conditions and a backlash from small and medium-scale user industries seeking government intervention to check rising prices amid the pandemic, SteelOrbis learned from trade and industry circles on Tuesday, May 11.
Sources said that secondary steel mills have increased rebar prices by around INR 1,000/mt ($14/mt) to INR 50,000-51,000/mt ($681-694/mt) ex-works, though tradable prices have been heard at higher levels of INR 53,000-54,000/mt ($722-735/mt) ex-Mumbai since re-sellers are pricing in higher logistical costs from lockdown conditions across the country.
Integrated steel mills have maintained their base prices at INR 53,000-54,500/mt ($722-742/mt) ex-works, but the tradable prices have been heard at levels of INR 56,000-58,000/mt ($762-790/mt) ex-Mumbai, the sources said.
While producers in the secondary sector have claimed that the price increase was compelled by the shortage of scrap in the local market, the high price of imports, rising transportation costs of all raw materials in view of the challenges from lockdown conditions, and the shortage of manpower, user industries have renewed efforts to engage the government to intervene in the market as manufacturing and construction activities have been severely impacted and capacity utilization and project implementation have been more than halved, as reflected in extremely small bookings of raw materials in the market.
According to Vinit Dungarwal, director of AM Project Consultants, the construction industry has taken a massive hit and real estate development projects have been stopped in their tracks. He said that the first wave of the pandemic was relatively more controlled, while the second wave has been very disruptive of the supply chain, compounded by the reverse migration of workers putting all projects in jeopardy.
$1 = INR 73.40