Indian local rebar prices surged with induction furnace operators increasing prices to offset higher energy costs and strong restocking by trade channels and large volumes bookings by engineering, procurement and construction (EPC) companies with integrated mills, SteelOrbis learned from trade and industry circles on Tuesday.
Indian rebar trade prices gained INR 2,000/mt ($24/mt) at INR 48,000/mt ($580/mt) ex-Mumbai and up INR 1,300/mt($16/mt) at INR 48,800/mt ($589/mt) ex-Chennai in the south.
Rebar trade price moved up INR 600/mt ($7/mt) at INR 44,600/mt ($539/mt) ex-Raipur and gained INR 2,300/mt($28/mt) at INR 45,100/mt ($545/mt) ex-Durgapur in the east.
According to the sources, trade channels out of the market for long time commenced restocking possibly readying for ‘busy season’ starting end-September while secondary mills supported by strong bookings by large construction companies attempted to push up prices to compensate for higher energy costs, particularly higher tariffs announced by various electricity distribution companies at the state level.
However, a section of market participants advised caution and risks of a price correction as ‘prices were moving up too fast’ and not supported by commensurate rise in demand from key sectors like urban housing construction or government off-take for rural construction projects, which were key demand points for smaller secondary producers.
“The overall revival in market conditions is a big positive coming after a prolonged bearish cycle. But our concern is over much of the price rise in cost driven and not demand driven. Return of large buyers enabled the market to turnaround. But price consolidation will depend on how much support is provided in terms of higher volume sales at the retail level,” a Kolkata based distributor said.
“A price correction is imminent. But quantum of correction and timing will depend how fast demand recovers during the post monsoon traditional busy season,” he said.
Exchange rate: $1= INR 82.80