Defying the overall bearish trend in the steel markets, local Indian rebar prices have increased amid improved retail sales from the housing sector even though the pace of the rise has eased slightly over the past week, SteelOrbis learned from trade and industry circles on Tuesday, January 4.
Sources said that rebar prices have increased by a range of INR 300-500/mt ($4-7/mt) across regional markets in the past week, with secondary mills reporting improved sales through retail outlets as real estate developers announced the launch of new projects.
According to the sources, rebar prices are up INR 300/mt ($4/mt) to INR 51,000/mt ($686/mt) ex-Mumbai, while they gained INR 500/mt ($7/mt) at Raipur in the central region to INR 47,700/mt ($642/mt) ex-warehouse.
“The divergence of the steady declines in flat product prices and the two consecutive weeks of gains in rebar prices is confusing and anticipating the short-term trend is a challenge,” a Kolkata-based steel distributor said.
“Of course, large real estate developers across the country are announcing the launch of new housing projects that will lead to incremental demand. At the same time, flat product prices are under pressure from rising inventories and new pandemic restrictions. The delay of the impact of the new wave of the pandemic on the longs project market cannot be ruled out either,” he said.
According to real estate sectoral research firm, Anarock, despite the pandemic, housing sales grew 71 percent in 2021 and are expected to reach 90-95 percent of pre-pandemic levels by the first half of the next fiscal year.
It also reported that new housing project launches in 2021 were up 85 percent over the previous year.
“The softening of input costs over the past two months has eased cost pressures on secondary mills. We feel that if demand and volumes in the market improve driven by the housing sector the mills will be conservative in increasing prices and will support higher trades in the market and improve margins on higher-volume sales. Hence, rebar prices can be expected to remain range-bound going forward,” a Mumbai based steel distributor said.
$1= INR 74.30
