Local Indian rebar prices have continued to suffer big setbacks over the past week amid rising inventories across supply chains, the near halt in retail bookings, and sentiments taking a big hit with the government calling for austerity measures, pointing to a further demand depression ahead, SteelOrbis learned from trade and industry circles on Tuesday, May 12.
Sources said that trade-level rebar prices are down INR 600/mt ($6/mt) to INR 48,400/mt ($509/mt) ex-Mumbai and have lost INR 1,000/mt ($11/mt) to INR 50,500/mt ($531/mt) ex-Chennai in the south.
Rebar trade prices have slumped by INR 1,900/mt ($20/mt) to INR 44,100/mt ($463/mt) ex-Raipur and are down INR 1,400/mt ($15/mt) to INR 43,700/mt ($459/mt) ex-Durgapur in the east.
According to the sources, both trade channels and secondary mills have been aggressively dropping prices to cope with rising inventories even as retail buyers have been mostly absent from the market, while large buyers representing engineering, procurement, construction (EPC) companies have been resorting to small-volume need-based purchases only.
A section of the market maintains that indications available from secondary mills show that inventory pressures are acute. Though varying from region to region, on average these mills are now carrying inventories of around 15-20 days’ equivalent of production, up from an average of 5-10 days a month ago.
“The government has called for austerity measures, seriously impacting market sentiments. This indicates that the impact of the war in the Middle East is getting deeper, with the demand depression to worsen in the coming days, based on the energy crisis hitting every industrial sector,” a Kolkata-based distributor said.
“Every segment of finished steel consumers is curtailing fresh bookings. Rising costs and falling demand are the first signs of stagflation setting in. We are in for prolonged bearish market conditions,” he added.
$1 = INR 95.14
