The uptrend in the local Indian rebar market over the past few weeks has stopped and prices have indicated a slight downward correction amid the slowdown in stock movements both in retail trade and bulk bookings, with the market expecting demand from key sectors to slow down ahead of the national elections amid political uncertainties, SteelOrbis learned from trade and industry circles on Tuesday, March 19.
Sources said that rebar trade prices are down INR 100/mt ($1.20/mt) to INR 49,400/mt ($596/mt) ex-Mumbai and have lost INR 200/mt ($2/mt) to INR 47,500/mt ($573/mt) ex-Chennai in the south.
Rebar trade prices have lost INR 800/mt ($10/mt) to INR 43,000/mt ($519/mt) ex-Raipur and are down INR 400/mt ($5/mt) to INR 43,000/mt ($519/mt) ex-Durgapur in the east.
The sources said that, with the national elections announced for the April-June period, no new government projects can be announced as per the election code of conduct, while ongoing projects will also slow down as the government will pause the release of new funds, thereby negatively impacting fresh raw material bookings.
Also, in the retail trade, bookings will slow down as most real estate developers or small rural and semi-urban projects will take a pause until the end of the polls, the sources said.
“Buyers are reluctant to make any purchases amid the expected slowdown and political uncertainties. The construction sector, largely dependent on migrant labour, will face a shortage of workers as migrant labour will head home to cast their votes in their respective place of residence where they are registered as voters. Most construction activity will take a pause till polling is concluded in early June,” a Kolkata-based distributor said.
“Also, the revival in the rebar market seen over the past week was largely driven by the supply side as secondary mills completed stock liquidation. The gain in price was because of lower supply and not because of significant improvement in demand. Hence, the current fall is a correction,” he said.
$1 = INR 82.80
