The downtrend in local Indian rebar market has gained momentum over the past week as larger mills have dropped prices to push higher volumes into the market, while intermediaries have slowed down fresh bookings based on the conservative outlook for a demand uptick in the post-monsoon season, SteelOrbis learned from trade and industry circles on Tuesday, August 26.
Sources said rebar trade prices have lost INR 800/mt ($9/mt) to INR 45,000/mt ($513/mt) ex-Mumbai, but have, however, remained unchanged at INR 45,500/mt ($519/mt) ex-Chennai in the south.
Rebar trade prices are down INR 400/mt ($5/mt) to INR 39,600/mt ($451/mt) ex-Raipur and have lost INR 400/mt ($5/mt) to INR 39,400/mt ($449/mt) ex-Durgapur in the east.
The sources said that a large section of the intermediaries were heard to be taking a very conservative assessment of post-monsoon revival in demand and hence were resorting to only need-based restocking and offering selective discounts based on volume bookings and credit terms.
Some producers said that high volatility in raw material prices have put renewed pressures on margins on the one hand, while on the other demand projections for the months ahead are being revised downwards by key consuming sectors.
“It is difficult to predict the short-term market trend. The downturn seen over the past few weeks could be a correction after the rapid gains earlier. But, at the same time, the weakness could be a prolonged one as several consuming sectors are downplaying the usual demand revival seen after the monsoon season,” a Kolkata-based distributor said.
“Large engineering procurement construction (EPC) companies too have been out of the market for the past several weeks, leading to low activity. We need to wait for a few more weeks for the monsoon season to come to an end and assess activities in medium-scale real estate development and urban infrastructure, which can offer an indication of the next phase of the market,” he added.
$1 = INR 87.73