The recent prolonged downslide in local Indian rebar prices has been checked slightly over the past week with some stability seen in the market from moderate bookings emerging from a few large buyers, but the mood has remained bearish and the outlook negative in the absence of positive demand drivers, SteelOrbis learned from trade and industry circles on Tuesday, June 16.
Sources said that rebar trade-level prices are down INR 100/mt ($1/mt) to INR 45,700/mt ($483/mt) ex-Mumbai but have remained stable at INR 46,000/mt ($486/mt) ex-Chennai in the south.
Similarly, rebar prices are also unchanged at INR 41,200/mt ($435/mt) ex-Raipur and stable at INR 41,100/mt ($434/mt) ex-Durgapur in the east.
According to the sources, while trade activity has continued to remain at low levels, the presence of a few large buyers from the engineering, procurement, construction (EPC) sector has provided some stability after the market suffered setbacks for the past several consecutive weeks.
However, several market participants claim that the stability will be short-lived as both distributors and secondary mills remain saddled with large inventories and, considering sustained weak demand, quick liquidation is not possible.
“We are not complacent seeing the temporary stability. There is too much supply and too little demand. Sellers - distributors and producers - have no option but to keep dropping prices to push sales. Extended credit is also being extensively used to manage inventories,” a Kolkata-based distributor said.
“With the monsoon expected to spread across the country, construction activities will be reduced, further dampening demand for finished steel. So, we can expect losses to be extended,” he added.
$1 = INR 94.63
