The recovery in the local Indian rebar market has proved to be short-lived with trade prices losing ground as sentiments have worsened and buyers have retreated perceiving demand growth unable to support high prices, SteelOrbis learned from trade and industry circles on Tuesday, February 28.
Indian trade rebar prices have lost INR 600/mt ($7/mt) to INR 56,000/mt ($676/mt) ex-Mumbai and are down INR 500/mt ($6/mt) at INR 54,000/mt ($652/mt) ex-Chennai in the south.
Rebar prices have lost INR 800/mt ($10/mt) to INR 50,300/mt ($607/mt) ex-Raipur in the central region and are down INR 1,000/mt ($12/mt) to INR 50,000/mt ($604/mt) ex-Durgapur in the east.
Sources said that the high volatility seen in the market in recent weeks has forced retail buyers to pull out, while engineering procurement and construction (EPC) buyers have also lowered fresh bulk bookings amid concerns over demand growth.
“There is a lot of pessimism emerging in the market over macroeconomic indicators like GDP and industrial growth data expected to be announced over the next few days. Overall, economic growth in the third quarter (October-December) is expected to be weak and continue through the coming quarters. This is weighing in on market intermediaries,” a Kolkata-based distributor said.
“Retail trade is depressed too. Real estate developers are reporting strong residential housing sales. But new project start-ups which determine fresh bookings are slowing down in the face of the rising cost of bank financing and inflationary pressures,” he said.
According to an official at Shyam Steel, eastern India’s largest rebar producer, secondary mills have no option but to increase prices in March, resulting from higher input costs of scrap, energy and transportation, even at the risk of a slowdown in stock movement from mills to the market.
$1 = INR 82.85
