The local Indian rebar market entered a new obvious downtrend over the past week following the rapid withdrawal of both retail and large buyers, combined with induction furnace operators dropping prices and dealers extending discounts to keep volumes moving, SteelOrbis learned from trade and industry circles on Tuesday, February 24.
Sources said that rebar trade prices have slumped INR 600/mt ($7/mt) to INR 49,400/mt ($544/mt) ex-Mumbai and are down INR 1,000/mt ($11/mt) to INR 48,500/mt ($534/mt ex-Chennai in the south
Rebar trade prices are down INR 600/mt ($7/mt) to INR 44,300/mt ($487/mt) ex-Raipur and have lost INR 200/mt ($2/mt) to INR 45,300/mt ($498/mt) ex-Durgapur in the east.
According to the sources, both retail buyers and engineering, construction, procurement companies (EPCs) have been almost completely absent from the market, resulting in a sharp drop in trade volumes, and both furnace operators and distributors have been either adopting aggressive discounting or extending credit terms to maintain movement of stocks in the market.
Regarding possible reasons for buyers pulling out, a section of the market maintains that it is a normal trend for restocking to fall towards the fiscal year-end on account of tighter liquidity and the need to conserve cash on the books. At the same time, large government-funded construction projects have run out of fund allocations for the current fiscal year and implementation has slowed down, leading to a deferment of raw material procurement.
“The fundamentally weak demand is catching up with the market. The recent surge in prices was mostly led by supply-side tightening. Now that supplies from induction furnaces are normalizing, excess supplies are not being absorbed in the absence of demand growth,” a Kolkata-based distributor said.
“The fiscal year-end will continue to weigh on the market for the coming weeks,” he added.
$1 = INR 90.90