The local Indian rebar market has firmed up across producing segments with small and medium-scale secondary producers increasing prices, taking cue from earlier weeks when large integrated steel mills increased prices, even though demand has remained soft and stocks movements are down, SteelOrbis has learned on Tuesday, February 18.
According to traders, small and medium-scale rebar producers which were seen to be maintaining their prices have been forced to revise prices in the face of cost pressure and are not in a position to sustain a combination of thin sales margins, rising input costs and higher inventory-carrying costs.
Markets sources said that secondary rebar producers, small and medium, have increased their prices by INR 1,000/mt ($14/mt) to around INR 33,000/mt ($463/mt) ex-stockyard.
Large integrated steel mills have maintained prices at higher levels of INR 38,800-39,300/mt ($544-551/mt) ex-stockyard.
The sources said that small and medium-scale producers are facing the biggest brunt of the slowdown in stock movement, a direct fallout of rising unsold ‘affordable’ housing projects, as revealed by the latest official data, while these producers are predominantly dependent on retail and small-volume bookings from such projects.
Industry data showed that there are about 7,75,000 affordable housing units unsold in major Indian urban residential markets across the country, or 50 percent of total inventory of such houses, and construction companies are not willing to undertake new projects in such market conditions and hence the resulting sustained low bookings of inputs like rebar, the sources pointed out.
$1 = INR 71.30