Local Indian rebar prices continued to post bigger losses in an oversupplied market, with both retail and large buyers cautious about committing to bookings in anticipation of a slowdown in consuming sectors such as construction following government warnings regarding the economy, SteelOrbis learned from trade and industry circles on Tuesday, May 26.
Sources said the trade-level rebar price slumped by INR 1,100/mt ($12/mt) to INR 46,800/mt ($491/mt) ex-Mumbai and lost INR 1,500/mt ($16/mt) to INR 48,000/mt ($504/mt) ex-Chennai in the south.
Rebar trade prices lost INR 1,100/mt ($12/mt) to INR 42,000/mt ($441/mt) ex-Raipur and were down INR 1,000/mt ($10/mt) at INR 41,800/mt ($438/mt) ex-Durgapur in the east.
According to the sources, the government over the past week issued more statements cautioning against stress building up across the economy due to the war in the Middle East and the need for austerity, particularly related to fuel and foreign currency. These warnings have been interpreted by market participants as a sign of a slowdown in economic activities across sectors, prompting large construction companies to pull back from restocking raw materials.
High energy costs, translated into frequent hikes in petrol and diesel prices, have triggered increases in logistics and transportation costs, leading to lower offtake of construction-grade steel from large mills, the sources said.
“Secondary mills are cutting output but are still saddled with high inventories, putting pressure on prices. At the distributors’ end, retail buyers from real estate developers are also almost completely absent from the market,” a Kolkata-based distributor said.
“Considering the current market scenario and macroeconomic indicators, rebar prices will continue to remain under a lot of pressure,” he added.
