The local Indian rebar market has showed mixed trends during the past week, with a largely negative bias with the prices of small and medium-scale producers coming under pressure, while large producers have been holding the price-line, SteelOrbis has learned.
According to market sources, rebar prices of small and medium-scale producers have edged down INR 200/mt ($3/mt) week on week to INR 32,100/mt ($448/mt) ex-stockyard. Rebar prices of large integrated steel mills have been maintained at INR 33,600/mt ($469/mt) ex-stockyard.
The sources said that large producers are still hopeful the government will increase spending on large projects after a six-year low GDP growth and such fresh funding would lead to higher rebar demand. But in contrast, small and medium-scale producers are being forced to steadily lower prices to push volumes in the market as the housing construction sector which is largely driven by private investment is refusing to show any signs of revival.
The sources said housing construction sector analyses show that the government’s special fund of $3.48 billion to infuse fresh funding to complete stalled housing projects would barely help six percent of such incomplete projects owing to stiff eligibility criteria. This has depressed sentiments among small and medium-size rebar producers and has disappointed earlier expectations that such government funds would enable speedier completion of housing projects and demand for rebar.
“Large steel mills are slowly feeling pressures from mounting inventories, particularly integrated steel mills with only long products in their portfolio. Indian rebar is not finding favour in key markets in Southeast Asia and overseas shipments are also not an option,” a manager at Rashtriya Ispat Nigam Limited said.
“However, large steel mills still have higher ability to carry inventories compared to small and medium-scale units and the latter are under greater compulsion to adjust prices. But it’s just a matter of time before even large producers will have to adjust prices for current month,” he added.
$1 = INR 71.70