Sudden positives have emerged in the local Indian rebar market, with trade prices showing gains from the rise in trade activity, with a number of participants attributing this to the recent price decreases triggering buying interest from key user sectors like real estate development and housing construction, although other sources have maintained a neutral stance on the sustainability of the price uptick, SteelOrbis learned from trade and industry circles on Tuesday, May 31.
Indian rebar trade prices are up INR 500/mt ($6/mt) to INR 56,400/mt($728/mt) ex-Mumbai and up INR 1,000/mt ($12/mt) to INR 54,500/mt ($703/mt) ex-Raipur in the central regional market.
Trade prices have gained INR 500/mt ($6/mt) to INR 60,500/mt ($781/mt) ex-Chennai in the south and are up INR 1,000/mt ($12/mt) to INR 53,000/mt ($684/mt) ex-Durgapur in the east.
According to a Kolkata-based distributor, while it is difficult and too early to definitely attribute the cause of the sudden rise in trade activity, it is possible that some users in housing construction considered the market to have bottomed out and that it is a good time to restock after the recent collapse in rebar prices.
However, officials at secondary mills were cautious on labelling the gain as a reversal of the prolonged downturn.
“The gains in prices coming after a prolonged downtrend are leading to some exuberance. But it is irrational. The gains in price are too modest to label them as a market rebound,” an official at the eastern region’s largest rebar producing secondary mill said.
“Gains will need to be sustained at least for a full quarter to have a positive impact on mill operations. Mill margins are under pressure and inventories are still rising. So, we will have to wait a while for the positives to consolidate,” he cautioned.
$1 = INR 77.50
