The correction in the local Indian rebar market has gained momentum with trade prices slumping amid a combination of the slowdown in stock movements in trade channels owing to the festival holidays, secondary mills lowering quotes to liquidate stocks, and a more pessimistic outlook on short-term demand growth, SteelOrbis learned from trade and industry circles on Tuesday, October 24.
Indian rebar trade prices have slumped INR 1,100/mt ($13/mt) to INR 49,900/mt ($600/mt) ex-Mumbai and have declined by INR 1,400/mt ($17/mt) to INR 44,800/mt ($538/mt) ex-Raipur in the central regional market.
Quotations for Chennai in the south and Durgapur in the east have not been not available owing to the extended festival holidays over the past week.
Sources said that the sharp drop in prices was attributed to retail buyers being almost completely absent, while sellers in some regions were reported to be lowering quotes to liquidate stocks and improve cash flows. At the same time, secondary mills were lowering prices to pass on benefits of the reduced cost of sponge iron and iron ore pellets to be able to push higher volumes of rebar into the market amid sluggish market conditions.
“There is some revision of the earlier bullish outlook on demand growth. Demand in the retail end from real estate developers has been slower than anticipated and hence the revival in the rebar market will be slower. The rising cost of borrowed funds is also impacting trade volumes, particularly of small and medium-scale distributors,” a Kolkata-based trader said.
“A more definitive trend will emerge after business activity resumes towards the end of the current week. But our assessment is that the market will remain sluggish and prices weak in the short term,” he said.
$1 = INR 83.20