The local Indian rebar market has showed tentative signs of a recovery during the past week, with small and medium-scale producers maintaining prices stable, while large integrated steel mills have increased prices expecting a demand revival from projects, SteelOrbis has been informed.
According to market sources, small and medium-scale producers have kept their rebar prices at INR 32,200/mt ($452/mt) ex-stockyard. However, large integrated steel mills have increased rebar prices during the past week by INR 500/mt ($7/mt) to INR 32,850/mt ($461/mt) ex-stockyard.
Intermediaries in the rebar market have seen a rise in the number of inquiries for high-volume purchases, mostly from medium-scale real estate developers in northern and southern India. At the same time, large integrated steel mills are seen to be taking advantage of improved sentiments to increase their branded rebar prices, also to offset the slight increase in their production costs.
“The mood among large integrated steel mills has improved due to at least a modest increase in project demand for rebar. The government has announced that large government-funded projects will be released immediately. This is expected to improve the cash flow of rebar producers,” an official at Steel Authority of India Limited (SAIL) said.
“The government has also directed state-run construction companies towards the early completion of all construction projects that are running behind schedule. This should improve the order book position of large steel mills, which bank heavily on supplies to projects,” the SAIL official added.
However, a section of traders pointed out that rebar prices of small and medium producers are showing divergent trends across regional markets, casting doubts that the demand revival may still be too weak and might not be sustainable. They pointed out that, while small and medium producers in the north around Mandi Govindgarh and Ghaziabad catering to markets in and around Delhi have kept prices stable, rebar prices in select regional markets like Durgapur in east and Raipur in central India are still sluggish in a range from INR 31,300/mt ($440/mt) ex-stockyard Durgapur to as low as INR 29,600/mt ($416/mt) ex-stockyard Raipur.
The sharp rebar price variations across regional markets are a clear indication that retail sales and housing sector construction activity has yet to consolidate, whereas such a consolidation would signal a sustained recovery in prices in the short term.
$1= INR 71.20