The local Indian rebar market has continued on an unprecedented surge in prices, with integrated and secondary mills effecting base price hikes and traded prices skyrocketing in anticipation that prolonged input cost increases will continue to fuel prices, SteelOrbis has learned from trade and industry circles on Tuesday, March 8.
Indian integrated mills have hiked rebar base prices by INR 5,000/mt ($65/mt), taking the effective ex-work base price to the range of INR 65,000-67,000/mt ($844-870/mt). Spot prices for bookings with some integrated mills have even been heard at INR 72,000-73,000/mt ($935-948/mt) ex-warehouse.
The across-the-board price increases by all mills have added fuel to traded prices with the ex-Mumbai price racing ahead by INR 12,300/mt ($160/mt) to INR 70,700/mt ($918/mt), while the traded price is up INR 9,400/mt ($122/mt) to INR 65,200/mt ($847/mt) ex-Raipur in the central region.
In the eastern regional market, rebar trade prices have gained INR 13,300/mt ($171/mt) to INR 68,300/mt ($887/mt) ex-Rourkela.
“The rebar market is on fire and prices are crazy. Producers are increasing prices by unprecedented levels citing increases in energy costs. The input cost escalation phase is expected to be a prolonged one and trade pricing is factoring in continued increases in base prices by producers on a weekly basis,” a Kolkata-based long steel product distributor said.
“The entire market is being driven by cost pressure. There is no consideration for the demand side. There is bound to be massive inflationary pressures in user industries like real estate and project costs. It is too early to forecast how the consumers’ market will react but any inflation is a negative for growth in user industries,’ he said.
According to a Kolkata-based large real estate developer, the costs of reinforced steel rebar had gone up by 45 percent even before the latest round of price increases and housing construction costs have increased by INR 300 ($4) per square foot over the past six months. With the latest increases in price, construction costs will go up by another INR 500 ($7) per square foot and developers do not have margins to absorb cost increases.
This would have a definitive impact on housing demand and hence on demand for and offtake of raw materials, he said.
$1 = INR77.00