Local Indian rebar trade prices have softened in reaction to stock liquidation by secondary mills, while trade channels have reported a fall in bookings, SteelOrbis learned from trade and industry circles on Tuesday, April 11.
Medium-term sentiments have also turned negative as a result of meteorological reports on the El Nino effect expected to come into play impacting monsoon rains, risks of lower crop output, and the fall in rural income and demand. They said that the mood was becoming very sombre amid the possible further slowdown in movement of stocks at the retail level if rural sectors come under stress.
Sources said that Indian rebar trade prices have lost INR 500/mt ($6/mt) to INR 55,000/mt ($671/mt) ex-Mumbai and are down INR 200/mt ($2/mt) to INR 54,300/mt ($662/mt) ex-Chennai in the south.
Rebar prices fell INR 100/mt ($1.2/mt) to INR 50,100/mt ($611/mt) ex-Raipur in the central region and are down INR 200/mt ($2/mt) to INR 49,800/mt ($607/mt) ex-Durgapur in the east.
“There is very strong supply-side pressure with both traders and mills carrying large inventories. The only stock that seems to be moving is from integrated mills to large projects against tender-based sales. Retail trade channels are facing a strong slowdown and stress from liquidity issues,” a Kolkata-based trader said.
“Overall, the secondary steel sector will continue to remain in negative territory as the outlook in the rural sector is very grim. The series of state-level elections over the coming months will also keep demand muted,” he said.
According to an official at Shyam Steel, eastern India’s largest rebar producer, “There is a large inventory overhang at most mills even at the start of the new fiscal year, which is unusual. Mills have not been able to liquidate old stocks and will have to continue to use pricing to push volumes in the market.”
“Where plant capacity utilization needs to be adjusted - a very critical decision, to cope with too much volume availability - is still not clear,” he said.
$1 = INR 82.00
