Shortages of construction grade rebar have become more widespread across regional markets in India, especially in the west and east of the country, pushing up tradable prices sharply over the past week even as primary and secondary producers have maintained base prices unchanged, traders and producers said on Tuesday, January 12.
The traders and producers said that the shortage of rebar faced by the construction industry has been worsening every week with supplies from secondary producers deteriorating amid high input costs and tight supplies of raw materials, while integrated steel mills have had no headroom to increase production, already operating their long product mills at optimal levels.
Integrated steel mills maintained official base prices at INR 48,500-49,500/mt ($661-674/mt) ex-stockyard, but tradable prices ex-Kolkata and ex-Mumbai surged to levels of INR 54,000-55,000/mt ($736-749/mt) ex-stockyard, compared to the tradable value in the range of INR 52,000-53,000/mt ($708-722/mt) ex-stockyard a week ago.
Rebar prices of secondary producers were reported at INR 46,000-47,000/mt ($627-640/mt) ex-stockyard, up from levels of INR 44,000-45,000/mt ($599-613/mt) ex-stockyard a week ago, the sources added.
“Secondary rolling mills used to produce about 45 percent of total rebar supplies in the market. They are now offering less than 30-32 percent of supplies to the market. Most large integrated producers like us offered about 55 percent of total rebar supplies to the market and this has now gone up to 65 percent and we cannot go up any more,” Jindal Steel and Power Limited’s managing director, V R Sharma, said, explaining the rising shortage of availability faced by the construction sector.
According to an official at the Confederation of Real Estate Developers Association of India, there have been reports that high-grade branded rebar trades have even been done at an unprecedented price of around INR 64,000/mt ($871/mt) in a few southern Indian regional markets in the state of Tamil Nadu.
“The unprecedented increase in rebar prices is a double blow for real estate developers. It is increasing housing development product costs at a time when housing customers are still nervous of making bookings after facing income losses from the pandemic,” he added.
$1 = INR 73.40