Local Indian rebar trade prices have softened over the past week as mid-sized induction furnaces were attempting to lower prices, passing on the benefits of the fall in prices of billets and sponge iron to spur trade activity, but fundamental demand issues in construction and housing have failed to improve market conditions, SteelOrbis learned from trade and industry circles on Tuesday, May 10.
Indian trade rebar prices are down INR 1,300/mt ($17/mt) to INR 62,700/mt ($809/mt) ex-Mumbai and have declined INR 1,000/mt ($13/mt) to INR 57,800/mt ($746/mt) ex-Raipur in the central regional market.
Trade prices have lost INR 800/mt ($10/mt) to INR 62,800/mt ($810/mt) ex-Chennai in the south and are down INR 1,000/mt ($13/mt) to INR 60,000/mt ($774/mt) ex-Durgapur in the east.
Sources at mills have pointed out that, with billet price falling INR 1,500/mt ($19/mt) in most regional markets, induction furnace operators were offered a window to lower prices and support the market.
However, most market participants pointing to the continued sluggish trading conditions said that negative macroeconomics like the 17-month consumer inflation of 6.5 percent, the slowdown in the manufacturing growth index, and the surge in prices of petroleum products have increased pressures on demand in key user industries like construction and real estate development. And hence lowering prices to drive demand would have a limited impact on macro-growth elements in upstream industries.
“Producers are attempting valiantly to drive demand by lowering prices. But with overall economic and manufacturing activity facing demand headwinds, pricing alone cannot increase market activity and fresh bookings by trade channels and users,” an official at eastern India’s largest rebar producer said.
$1 = INR 77.50
