The local Indian rebar market has continued to decline, with secondary mills dropping prices to push higher volumes at a time when retail trade volumes are seen to be falling rapidly and with large projects resorting to only need-based procurement, SteelOrbis has learned from trade and industry circles.
Indian rebar trade prices are down INR 500/mt ($6/mt) to INR 48,200/mt ($579/mt) ex-Mumbai and have lost INR 300/mt ($4/mt) to INR 48,300/mt ($580/mt) ex-Chennai in the south.
Rebar trade prices have lost INR 1,100/mt ($13/mt) to INR 43,200/mt ($519/mt) ex-Raipur and are down INR 200/mt ($2/mt) to INR 43,000/mt ($516/mt) ex-Durgapur in the east.
According to the sources, secondary mills, which are unable to increase prices to offset input cost increases amid weak market conditions, are on the contrary dropping prices to push higher volumes into the market to be able to improve cash flows and reduce dependency on borrowing to meet fixed costs of operations.
“The long products market is now definitely into an extended bearish zone. The high cost of funding the high interest rates on bank loans is impacting small and medium-scale real estate developments, reducing retail off-take of rebar. The downturn in market conditions is worse in regional markets compared to metros,” a Kolkata-based distributor said.
“Large integrated mills will be able to weather the downturn better based on relatively better tender-based sales to large construction companies. Induction furnace operators will need to consider further cuts in output as the continued push of volumes into the market at lower price is not viable for long,” he said.
$1 = INR 83.30
