Local Indian rebar prices have surged over the past week amid mounting fears of supply tightening from the emerging shortage of scrap and semis like sponge iron, triggering near panic restocking particularly in the retail trade, SteelOrbis learned from trade and industry circles on Tuesday, March 31.
Sources said that rebar trade prices have gained INR 600/mt ($6/mt) to INR 51,600/mt ($547/mt) ex-Mumbai and are up INR 700/mt ($7/mt) to INR 51,700/mt ($548/mt) ex-Chennai in the south.
Alongside regional markets, retail trade witnessed bigger gains with trade prices up INR 2,000/mt ($21/mt) to INR 48,000/mt ($509/mt) ex-Raipur in the central region and up INR 800/mt ($8/mt) to INR 47,000/mt ($498/mt) ex-Durgapur in the east.
According to the sources, fear has gripped the market amid imminent disruption in supplies from secondary mills as the impact of the war in the Middle East percolates down to local raw material availability. The shortage of gas available for cutting operations is beginning to hurt scrap yards. At the same time, sponge iron availability has also been disrupted by the shortage of fuel, and these twin factors put the output levels of secondary mills under risk.
Secondary mills are reported to be receiving strong bookings from distributors, restocking aggressively anticipating that the rising energy crisis will impact supplies from mills.
“There’s an element of panic creeping into the market. There are too many uncertainties across the supply chain and its impact - energy supply disruptions, inflationary pressure build-up, demand projections, and emergency policy support from the government,” a Kolkata-based distributor said.
“Rebar prices will remain firm. But the question is whether the market and more importantly demand will support a continuously rising price curve,’ he added.
$1 = INR 94.31