The revival in the local Indian rebar market seen earlier has gained momentum over the past week, with both integrated and secondary steel mills increasing prices, with the withdrawal of discounted sales and traded prices firming up amid the improved outlook for construction activities, SteelOrbis learned from trade and industry circles on Tuesday, October 5.
Indian secondary mills increased base prices by an average of INR 1,500/mt ($20/mt) and, as a result, traded prices reached INR 49,700-51,500/mt ($669-693/mt) ex-Mumbai and around INR 50,000/mt ($673/mt) ex-Chennai in the south.
Integrated mills have increased base prices for October deliveries by INR 2,000/mt ($27/mt) to levels of INR 56,000-57,000/mt ($752-767/mt) ex-works, but select producers were offering volume discounts limited to INR 1,000/mt ($13/mt), sources said.
Producing mills said that the current round of price increases after extended sluggish market conditions are largely supported by optimism that the resumption of post-monsoon construction activities seen this month will gain momentum and enable the market to absorb higher prices.
“Bookings received from large projects revived in September and we expect them to gain momentum. Retail sales are still slow, but we expect demand from real estate development to gain momentum. Overall, the worst bear phase seems to be passing,” a source at Shyam Steel, eastern India’s largest rebar producer, said.
“Government-funded construction activities are gaining pace and booking volumes are higher than last month. But for secondary mills, there is still headroom for prices to move up another INR 2,000/mt ($27/mt) to prompt an increase in average plant capacity utilizations currently at lows in the range of 50-60 percent,” sources said.
$1 = INR 74.30
