Local Indian rebar prices have showed no change during the past week amid negligible trading due to the combination of festival holidays and the persistent negative outlook of key user industries, sources told SteelOrbis on Tuesday, October 27.
The sources said that infrastructure construction companies and real estate developers have continued to remain cautious over committing fresh input bookings in the face of a liquidity crunch and a lack of credit from lending institutions, while secondary rebar producers do not have any leverage to push volumes with rebar prices already at low levels.
Market sources said that integrated steel mills have maintained rebar prices at INR 37,450/mt ($509/mt) ex-stockyard. Secondary steel mills have also kept prices unchanged, at around INR 30,700/mt ($418/mt) ex-stockyard.
The sources said that the central bank, the Reserve Bank of India (RBI), has announced a new regulatory framework for housing finance companies which, inter alia, lays down differentials between non-banking finance companies and housing finance companies, and lending institutions are still assessing the impact of the new regulations and this may disrupt the flow of credit to real estate developers, at least in the short term.
“While large real estate developers are seeing some upturn in bookings and the pace of housing project development, in mid and small segment housing construction, the prime market for the secondary steel sector is still under a depression and hence the low off-take of inputs, which is putting pressures on inventories of small and medium scale rebar producers,” an official at Shyam Steel, eastern India’s largest rebar producer, said.
“The pace of rural housing construction too, which showed signs of supporting incremental demand for rebar soon after the easing of the lockdown, is belying expectations owing to shortage of manpower and fund flow,” he added.
$1 = INR 73.50