Mood in Indian rebar market still negative despite expected base price hike

Tuesday, 06 April 2021 15:38:41 (GMT+3)   |   Kolkata
       

The local Indian rebar market has been hit by strong negative sentiments, a weakening of tradable prices, and a weakening of trading activity in reaction to the worsening of the pandemic situation and more key industrial regions coming under new lockdowns, even amid reports of planned price increases by primary producers, SteelOrbis learned from trade and industry circles on Tuesday, April 6.

Market sources said that tradable rebar prices of primary sellers have softened to around INR 48,000-49,000/mt ($655-668/mt) ex-Mumbai, compared to the traded price of INR 49,000-50,000/mt ($668-682/mt) last week. Primary producers have maintained base priced at INR 48,500/mt ($662/mt) ex-works so far, amid reports that steel mills are planning an increase of at least INR 2,000/mt ($27/mt) defying the negatives building up among end-use industries from a fresh wave of the pandemic and state governments starting to impose restrictions on general public activities in major industrial hubs.

The tradable rebar price of secondary producers has been assessed at around INR 46,000-47,000/mt ($628-641/mt) ex-Mumbai, down from levels of around INR 48,000/mt ($654/mt) a week ago.

Several market participants said that, while it is still too early to assess the impact of new pandemic restriction on construction industries and the movement of raw materials and workers between sites, dealers and several end-users have already started to either lower or stop fresh bookings to avoid risks of large inventory build-ups if projects are hit by lockdown restrictions.

According to a construction and real estate advisory firm, the non-raw material costs of all construction activities have been pushed up by 5-6 percent owing to the pandemic and any fresh restrictions to check the new wave would further push up such costs that include transportation of men and material from sites, implementing health safety measures, and labor costs. He said that integrated steel mills’ plans to keep pushing up prices of rebar will aggravate the cost situation for end-users, and the only option will be to lower raw material stocking and this can only trigger a “vicious cycle” in a market with falling demand.

$1 = INR 73.30


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