The downtrend in the local Indian rebar market has continued with prices coming under renewed pressures from adverse weather conditions, induction furnace operators further dropping prices to push higher volumes into the market, and pessimism over any immediate recovery as prices moved further below a two-year low, SteelOrbis learned from trade and industry circles on Tuesday.
Indian rebar trade prices have lost INR 500/mt ($6/mt) to INR 46,000/mt ($559/mt) ex-Mumbai and are down INR 300/mt ($4/mt) to INR 47,500/mt ($577/mt) ex-Chennai in the south.
Rebar trade prices, however, have showed a diverse trend in Raipur in the central region gaining INR 1,300/mt ($16/mt) to INR 44,000/mt ($535/mt) with traders attributing this to one-off bulk bookings from at least two large engineering procurement, construction (EPC) companies, leading to a localized shortage of supplies to meet immediate demand. Rebar prices are down INR 200/mt ($2/mt) to INR 42,800/mt ($520/mt) ex-Durgapur in the east.
“With prices falling well below the two-year-low mark, pessimism is growing rapidly all round, both over the demand situation, macro-economic indicators and the weather. Hopes of a quick recovery post-monsoon are also being tempered by steadily falling bookings at the retail level at a time when trade generally starts restocking for the busy season starting in September,” a Kolkata-based distributor said.
“Secondary mills are in a lose-lose situation. Strangely, billet prices have moved up over the past week, but rebar prices have continued on a downtrend, with margins close to negative for most sellers,” he said.
According to an official at Shyam Steel Limited, eastern India’s largest rebar maker, “This year the price fall in the monsoon season has been much more severe than usual. Production cuts have been maximized by most mills and cannot go down further because of fixed costs.”
“It is hazardous to predict a market bottom in the current conditions. We can write off the second quarter (July-September) and hope for recovery thereafter, if at all,” he said.
$1 = INR 82.30