The local Indian rebar market has continued on a strong bull run over the past week with integrated steel mills announcing that they will implement phased hikes in prices during January, which pushed up tradable prices amid reports of an increased shortage of supplies from secondary producers in the face of tight supply and higher prices of raw materials, SteelOrbis has learned on Tuesday, January 5.
According to officials at integrated steel mills, the latter soon after increasing prices in the last week of the previous year have set a target of increasing rebar prices by at least INR 4,000/mt ($55/mt) progressively during the coming weeks in January.
In the first tranche effective January 5, at least three private integrated steel mills raised prices by INR 2,000/mt ($27/mt) to INR 48,500-49,000/mt ($664-671/mt) ex-stockyard and short supplies in the market nudged up tradable ex-Mumbai prices to levels of around INR 52,000-53,000/mt ($712-726/mt) ex-stockyard.
In addition, market participants said that, while secondary steel mills have not officially made any announcement of base price increases, most such producers facing a shortfall in production are charging heavy premiums in confirming bookings at prices of INR 44,000-45,000/mt (602-616/mt) ex-stockyard compared to secondary mills’ rebar price of around INR 40,000/mt ($548/mt) ex-stockyard in the earlier week.
Two officials from private integrated steel mills have confirmed that the secondary sector is failing to maintain production in the face of shortages and high prices of every input like scrap or billet, and secondary sectors’ share in the total rebar market has been falling steadily.
Citing industry estimates, they said that top six secondary rebar producers which accounted for about 40 percent of the sector’s total rebar supplies to the market have fallen to a share of 30 percent of total supplies, leading to a sharp tightening in the market and a surge in prices.
The officials said that even the large secondary steel mills are facing challenges in increasing production owing to supply and pricing constraints of inputs.
$1 = INR 73.00