Local Indian rebar prices have remained firm over the past week with primary producers reporting stronger bookings, but the outlook has been hit again by uncertainty, particularly for secondary mills, with builders building up pressures on the government, seeking an intervention to rein in prices, SteelOrbis learned from trade and industry circles on Tuesday, June 22.
Primary rebar producers have remained at higher price levels at INR 55,000-56,000 ($742-756/mt) ex-works, with traded prices at INR 58,500/mt ($789/mt) ex-Mumbai on average. Rebar prices of secondary producers are still at INR 51,000-52,000/mt ($688-701/mt) ex-works and traded prices have been heard at INR 54,500/mt ($735/mt) ex-Mumbai.
According to the sources, primary producers are reported to have been actively engaging in fresh high-volume rebar sales through the tendering route to various central government-funded projects and, since these are long-term supply contracts, they are well placed in production planning for the long product portfolio.
However, the outlook for secondary rebar sellers has been hit by uncertainties as builder associations across regions have renewed efforts to lobby with various state-level governments, seeking intervention in controlling spiralling prices of construction materials like steel and cement.
The Builders’ Association of India (BAI) and the Confederation of Real Estate Developers’ Association of India (CRDAI) are reported to be lobbying governments in the southern and northern regions against rising costs of long steel products, which are leading to higher housing costs and dampening demand.
The real estate developers have pointed out that housing construction costs have gone up by INR 500 ($7) per square feet over the past few months and the housing market is still so depressed that the market will not absorb higher costs in the final pricing of ready homes.
According to a Mumbai-based long product wholesaler, in the medium term high prices combined with sluggish demand for real estate, developers will have no option but to slow down the pace of project implementation and to reduce raw material bookings.
The trader said that this would have a strong impact on secondary rebar producers highly dependent on retail sales compared to integrated mills, and would widen the asymmetry between the two steel producing segments.
$1 = INR 74.10
