Local Indian rebar traded prices have witnessed an unprecedented rise in recent times as medium-sized secondary mills have increased prices steeply on fears of a drastic increase in energy costs and supply chain disruptions triggering a shortage of imported coal, SteelOrbis learned from trade and industry circles on Tuesday, March 1.
Sources said that rebar prices have skyrocketed by INR 3,400/mt ($45/mt) to INR 58,400/mt ($776/mt) ex-Mumbai and are up INR 4,300/mt ($57/mt) to INR 55,800/mt ($741/mt) ex-Raipur in the central region.
In the eastern regional market around Rourkela, rebar traded price are reported to have gained INR 3,100/mt ($41/mt) to INR 55,600/mt ($738/mt) ex-warehouse, trade sources said.
“There is near panic in the market over fears of an unprecedented cost increase in all forms of energy following Russia’s adventurism and its impact on global energy and crude oil prices,” a steel sector analyst with a Mumbai-based financial services advisory firm said.
“Government oil companies have not increased prices owing to elections in a number of states even after the crude oil price breached the $100 per barrel mark following Russia’s invasion of Ukraine. Retail prices of petrol diesel will be increased as soon as election results are announced on March 10 and our assessment is that it will be hiked by at least 33 percent, as the current retail price is pegged to the imported crude price of $75 per barrel,” he said.
“Coal prices are moving north. State miner Coal India Limited is considering a substantial price increase. The turmoil in international financial markets has forced the Indian currency below the INR 75 mark to the dollar, making costly imported coal costlier. Mills have no option but to increase prices even at the risk of a further slowdown in stock movement in the absence of a demand uptick,” he added.
According to another analyst, about 60 percent of costs of cement and steel is directly and indirectly linked to the cost of imported crude oil. “How much of this cost push will be passed on by real estate developers is difficult to quantify as the Russia-Ukraine situation is fluid. But it is already clear that, with real estate prices going up, builders will slow down new projects, and hence low demand for raw materials,” the analyst said.
$1 = INR 75.30