Local Indian rebar prices have been maintained at higher levels after the hikes effected last month, riding on the back of slight improvements in offtake seen by secondary producers and the government’s increased support for construction of affordable housing projects across the country, SteelOrbis has learned on Tuesday, December 1.
Sources said that government fiscal support and increased lending channels to developers of affordable housing projects have triggered hopes of demand support for rebar from secondary producers, but they were quick to add that the improvements in off-take seen over the past week are still too tentative to enable them to forecast a definitive revival in the long product market.
Sources said that rebar prices of integrated steel mills have remained at INR 39,450/mt ($533/mt) ex-stockyard, while secondary rebar prices have also remained unchanged at higher levels of around INR 33,200/mt ($448/mt) ex-stockyard.
However, several traders said that most secondary producers are continuing to face cost-push pressures in view of surging merchant sales prices of billets and indicated that at least two central India-based secondary rebar producers have gone in for a second price increase in consecutive weeks, increasing their trade prices by INR 1,000/mt ($13/mt) to INR 34,200/mt ($462/mt) ex-stockyard.
They said that this was being taken as an indication that both integrated steel mills and secondary producers will go in for further rebar price increases in December to absorb rising costs of billet sourced from the market, even risking resistance from buyers at a time when the latter are seen to be increasing their bookings.
Citing a report of a financial services firm, an official from eastern India’s largest rebar producer said that housing sales were up 60 percent during the second quarter of 2020-21, largely driven by the affordable housing segment and this would need to be sustained through the rest of the fiscal year to drive demand for rebar from secondary producers. However, the official expressed concern over rising costs forcing producers to increase rebar prices and so key consuming sectors in price-sensitive market conditions might be forced to keep bookings of rebar at lower levels.
$1 = INR74.00