After a short-lived correction, local Indian rebar prices have surged over the past week reacting to the return of large buyers represented by engineering, procurement, construction (EPC) companies, tight supplies of semis for re-rollers, coupled with aggressive restocking by distributors amid reports of the government planning a significant boost to infrastructure spending when presenting the national budget for 2026-27 next month, SteelOrbis learned from trade and industry circles on Tuesday, January 20.
Sources said that rebar trade prices are up INR 1,700/mt ($19/mt) to INR 50,000/mt ($550/mt) ex-Mumbai and have surged INR 2,000/mt ($22/mt) to INR 47,000/mt ($517/mt) ex-Chennai in the south.
Rebar trade prices are up INR 1,500/mt ($17/mt) to INR 44,500/mt ($490/mt) ex-Raipur and have gained INR 2,000/mt ($22/mt) to INR 43,800/mt ($482/mt) ex-Durgapur in the east.
According to the sources, large buyers among EPC companies returned to the market booking large volumes from integrated mills after a brief pause. While fresh bookings have been partly attributed to the resumption of the busy construction season ahead, the sources said that reports coming from the government indicated the national budget would give a further boost to capital expenditure in infrastructure projects, improving the outlook for the coming quarter.
It was pointed out that availability of semis in the market was tightening, resulting in a hardening of prices and mills have been passing on the higher price of billets to end-users of construction grade long products, resulting in higher prices at the trade level.
Two analysts with financial advisory services said that the government had provided for 3.4 percent of GDP in capital expenditure in the national budget for 2025-26 and indications are that in the forthcoming budget this is likely to be further hiked to five percent of GDP. The proposed higher government spending, the analysts said, has triggered a fresh rally in the finished steel market.
“The short-lived correction and the new rally in prices have caught most market participants by surprise. Even though retail sales remain muted in comparison, the aggressive buying seen from large construction companies has been sufficient to reverse the recent fall and push the market up to a new trajectory,” a Kolkata-based distributor said.
“While another correction cannot be ruled out, the market will now be driven by optimism over the budget to be unveiled on February 1,” he added.
$1 = INR 90.85