Indian secondary rebar producers have continued to increase prices for the second consecutive week on the back of rising input costs, while integrated steel mills have maintained prices at their previous increased levels even as the market showed no change in its depressed demand conditions, SteelOrbis has learned on Tuesday, November 10.
Secondary rebar producers have hiked prices by around INR 1,000/mt ($13/mt) to the range of INR 32,200-32,500/mt ($434-438/mt) ex-stockyard. Integrated steel mills, however, have kept their prices unchanged at INR 38,450-38,700/mt ($518-522/mt) ex-stockyard.
Traders and sources said that most secondary steel mills are facing the dual challenges of shortages of scrap in the local market combined with high prices as supplies from the Mandi Govindgarh scrap market in northern India have been severely impacted by freight trains not plying to Punjab state as a result of the federal government response to farmers’ agitation in the region.
Not only has the low availability of raw materials impacted secondary mills, they are also facing challenges of transporting finished rebar to customers in the absence of freight train services, leading to mounting inventories at producers.
“Challenges in the long product market are very strong. Unlike flat products, long product usage mostly involves long gestation period projects, which are not showing strong signs of revival. Projects in the pipeline are also facing challenges of adequate funding and large rebar users are cautious in making bookings,” an official at state-run long product steel mill Rashtriya Ispat Nigam Limited (RINL) said.
“The worst might be over as downside risks to rebar prices from current levels are minimal as producers do not have any pricing power to lower prices to trigger demand. The government committing higher spends on large projects can only be expected in the first quarter of next fiscal and until then rebar prices in the market can be expected to move in narrow ranges with minor changes, he added.
$1 = INR 74.20