The recovery in the local Indian rebar market has gained momentum over the past week as large buyers have continued to extend large bookings and secondary mills have been attempting to push up prices, although divergent views are heard as regards the sustainability of the rebound, SteelOrbis learned from trade and industry circles on Tuesday, August 4.
Sources said that trade-level rebar prices have gained INR 1,000/mt ($10/mt) to INR 46,000/mt ($482/mt) ex-Mumbai and are up INR 400/mt ($4/mt) to INR 46,800/mt ($491/mt) ex-Chennai in the south.
Rebar trade prices have gained INR 200/mt ($2/mt) to INR 40,800/mt ($428/mt) ex-Raipur and are up INR 300/mt ($3/mt) to INR 40,600/mt ($426/mt) ex-Durgapur in the east.
According to the sources, large buyers among engineering, procurement, construction (EPC) companies were heard to be increasing booking volumes, providing support for prices and opening up a window for mills to push up prices and improve margins from stock liquidation.
With average booking volumes improving and prices hardening, mills and trade channels are optimistic for a more rapid balancing of the oversupply situation seen over the past several weeks.
However, despite the recovery, divergent views prevail on the sustainability of the uptrend. Those on the positive side have claimed that rapid restocking would gain momentum in the coming weeks, as the post-monsoon season is very close and the resumption of construction activities across the country would drive the next phase of recovery.
But those maintaining a negative outlook have pointed out that most of the buying seen over the past week has been limited to only large buyers and has not been broad-based since retail buyers - critical for secondary mills and smaller producers – have remained largely out of the market. With EPC buyers known to make quick exits from the market upon completing their restocking, the market still faces downside risks.
