The local Indian rebar market has slipped into a more definitive correction phase with prices seeking lower levels with buyers becoming cautious and optimism over the increased government capital outlay on infrastructure failing to boost sentiments, SteelOrbis learned from trade and industry circles on Tuesday, February 7.
Indian rebar prices have lost INR 200/mt ($2/mt) to INR 58,400/mt ($706/mt) ex-Mumbai and are unchanged at INR 53,200/mt ($643/mt) ex-Chennai in the south.
Rebar prices are down INR 700/mt ($8/mt) to INR 51,000/mt ($617/mt) ex-Raipur in the central region and have lost INR 700/mt ($8/mt) to INR 50,200/mt ($607/mt) ex-Durgapur in the east.
According to trade circles, while the government increased capital outlay on infrastructure in the national budget by 36 percent, the market perceives that incremental demand from this will accrue to large integrated mills, which are suppliers to large tender-based projects.
But the absence of any specific policy measures for real estate development in terms of cost of financing or tax incentives has failed to improve sentiments among trade channels and secondary mills, traders said.
“The market correction was much expected after a short surge in price levels. However, it is a challenge to forecast how deep the correction will run and the next bottom,” a Kolkata-based distributor said.
“A lot had been riding on the national budget. The latter has supportive initiatives for large players but not so much for secondary mills or smaller buyers in trade channels. Hence, retail trade has become very cautious,” he said.
However, on the producer’s side, there were indications that mills will continue to explore options to increase listed prices. “Sponge iron, billet and coal prices are all rising amid inflationary pressures. Secondary mills are continuously assessing options to increase prices to sustain operational viability,” a source in Shyam Steel Limited said.
$1 = INR 82.70
