After their previous freefall, local Indian rebar trade prices have staged a smart recovery over the past week amid improved demand, the dissipation of builders’ threat to halt construction across the southern region, and the sharp increase in merchant billet sales prices, SteelOrbis learned from trade and industry circles.
Indian rebar trade prices have gained INR 2,000/mt ($26/mt) to INR 65,300/mt ($856/mt) ex-Mumbai and are up INR 2,600/mt ($34/mt) to INR 60,600/mt ($795/mt) ex-Raipur in the central regional market. Trade prices have increased by INR 2,000/mt ($26/mt) to INR 66,000/mt ($865/mt) ex-Chennai in the south.
“Sentiments among secondary mills improved as reports trickled in that large builders in southern and eastern India were not actually going ahead with halting construction of ongoing projects to protest rising prices,” a Kolkata-based steel distributor said.
“But the high volatility seen over the past two weeks is not good for sustaining demand. Mid-sized secondary mills have been quick to increase prices at the first signs of bookings coming in. Such price instability can trigger another negative market correction,” he said.
However, an official at Shyam Steel, eastern India’s largest rebar manufacturer, said that an energy crisis seemed to be looming ahead for the country with reports of coal shortages coming in from the northern region. He said that volumes of coal available at e-auctions held by coal companies have been tightening and that rising energy costs are being passed on by mills and as the summer season peaks the shortage of coal would further increase costs and prices.
“The long product market is dichotomous and a challenge to forecasting the outlook. On one hand, construction costs have escalated by 15-20 percent over the past two months. But demand for residential housing in metropolitan areas like Mumbai in the last quarter of the fiscal year 2021-22 was up 15 percent over the previous corresponding quarter. Hence, the market dynamics can swing in either direction in the medium and long terms,” a steel sector analyst with a Mumbai-based financial advisory firm said.
$1 = INR 76.26
