The local Indian rebar market has seen the anticipated correction during the past week, with prices losing ground amid buyers’ resistance, large engineering procurement construction (EPC) companies pausing restocking, and distributors adjusting prices downwards and extending credit terms in attempts to keep driving the market, SteelOrbis learned from trade and industry circles on Tuesday, January 13.
Sources said that rebar trade-level prices are down INR 700/mt ($8/mt) to INR 48,300/mt ($536/mt) ex-Mumbai and have also lost INR 700/mt ($8/mt) to INR 45,000/mt ($499/mt) ex-Chennai in the south.
Rebar trade prices have slipped INR 1,100/mt ($12/mt) to INR 43,000/mt ($477/mt) ex-Raipur in the central region and are down INR 200/mt ($2/mt) to INR 41,800/mt ($463/mt) ex-Durgapur in the east.
According to the sources, buyers across user sectors are losing “appetite for high-priced steel” with a section in real estate development saying that construction costs for housing have gone up by 15-20 percent, following the surge in construction grade steel over the past one to two months.
The sources said that, since it is difficult to pass on higher input costs in ongoing projects, users are reducing restocking of raw materials and waiting for the correction to gain momentum and prices to settle “at more realistic levels”.
The pace of stock liquidation at distribution levels has fallen sharply with buyers retreating and sellers for their part have been either dropping prices or extending credit terms to sustain the pace of movement of stocks in the market, the sources said.
In absence of a strong demand driver, the correction is expected to deepen in the coming weeks. Buyers will also continue to be cautious in concluding bookings at the current levels and instead wait for macroeconomic clues from the national budget to be presented by the government next month, the sources added.
