Pressures mounted rapidly on the local Indian rebar market with trade prices slumping as sentiments and trade activity turned very negative with secondary mills dropping prices to liquidate stocks, SteelOrbis learned from trade and industry circles on Tuesday, July 11.
Indian trade rebar prices crashed INR 3,000/mt ($36/mt) to INR 47,100/mt ($570/mt) ex-Mumbai and slumped INR 900/mt ($11/mt) to INR 48,300/mt ($585/mt) ex-Chennai in the south.
Rebar price lost INR 1,800/mt ($22/mt) at INR 44,800/mt ($542/mt) ex-Raipur and down INR 1,600/mt ($19/mt) at INR 44,900/mt ($544/mt) ex-Durgapur in the east.
The sources said that intensification of the monsoon rains and heavily flooding and landslides reported from vast regions across northern Indian aggravated the already negative mood during the lean season period.
“While bad weather conditions and season downturn are expected this time of the year. Market conditions were getting worse every week more on extremely poor fundamentals by inflationary pressures, tight credit availability to small and medium scale companies and industries and retail buyers almost deserting the market,” a Kolkata based distributor said.
“The bearish conditions are so deep that optimism over post-monsoon recovery is also very bleak. We expect losses to get extended further irrespective of weather conditions because finished steel market overall is getting weaker. Mere government expenditure on projects will not be sufficient support to revive the market,” he said.
At least two officials in private secondary mills said that secondary producers have cut down capacity utilizations to 70 percent from 80-85 percent a month ago, but were still facing pressures of inventory build-up, forcing continuous lowering of prices.
They said that further cut in capacity utilizations is not viable owing to fixed costs but mills will not have any other option if current downturn in market extends to September-October, when the market usually rebounds.
$1= INR 82.60