The previous mixed trends in the Indian local rebar market have shifted in a positive direction with a recovery in prices amid cautious optimism regarding a possible pick-up in demand led by government spending in the last quarter of the fiscal year, SteelOrbis learned from trade and industry circles on Tuesday, December 28.
The rebar prices of secondary mills have bounced back by INR 500-1,500/mt ($7-20/mt) with gains highest in the central regional market of Raipur, where price setbacks were large in the earlier week.
The sources said that rebar prices have gained INR 1,000/mt ($13/mt) to INR 50,700/mt ($676/mt) ex-Mumbai, while in the regional market of Raipur they have surged by INR 1,500/mt ($20/mt) to INR 47,200/mt ($629/mt) ex-warehouse.
In the eastern regional market of Rourkela, price gains have been modest at INR 500/mt ($7/mt) to INR 44,800/mt ($597/mt) ex-warehouse, the sources said.
“Improved sentiments are being driven by expectations of increased government spending on projects as the fiscal year draws to a close. Though demand in retail sales remains low, hope is rising with real estate developers starting to announce new projects,” a source at Shyam Steel Limited, eastern region’s largest rebar producer, said.
“However, the improvement in prices is still very tentative and can move either direction in the short term as there can be a lag between the government committing increased funds for projects in the last quarter and actual procurement,” the sources said.
A steel sector analyst with a Mumbai-based financial services firm said that between April and September the number of new real estate projects launched across the country is up 38 percent on year-on-year basis, which roughly would translate to about 94,000 residential units and these new projects would offer incremental support to rebar demand in the coming months.
$1 = INR 75.00
