Local Indian rebar prices have showed little change amid minimal trading and the absence of buyers either from large construction or retail segments owing to the bearish demand outlook and expectations of prices still being some distance from a new bottom, SteelOrbis learned from trade and industry circles on Tuesday, December 10.
Sources said that rebar trade prices have remained unchanged at INR 46,500/mt ($549/mt) ex-Mumbai and are stable at INR 46,000/mt ($543/mt) ex-Chennai in the south.
Rebar trade prices have also showed no week-on-week change at INR 41,400/mt ($489/mt) ex-Raipur and are stable at INR 40,200/mt ($475/mt) ex-Durgapur in the east.
According to the sources, trade activity has been minimal as large construction engineering procurement (EPC) companies have continued to stay away from placing new bookings with large integrated mills, while the retail trade has also beenb negligible as small and medium-scale real estate developers and semi-urban infrastructure companies have been facing liquidity challenges, with tight cash flows forcing them to be cautious in raw material restocking.
“The demand outlook is expected to remain bearish in the medium term and hence the rebar market will continue to show sideways movement in a narrow range. No segment of the user industry has confidence and the situation is made worse by tight availability of credit from financial institutions,” a Kolkata-based distributor said.
“Induction furnace operators are carrying higher-than-average inventories and their average capacity utilization, as per rough estimates, is not more than 75 percent. Under the circumstances, distributors like us are not restocking as the price still has significant downside potential as discounted sales can only get more aggressive from the producers’ side,” he said.
$1 = INR 84.70