Pressures have continued to mount in the local Indian rebar market with prices seen to be suffering particularly higher setbacks in major trading hubs, as buyers across retail and the large construction sector have progressively reduced bookings in tandem with widespread rains across regions and weak demand, SteelOrbis learned from trade and industrial circles on Tuesday, June 10.
Setbacks to prices have been aggravated by induction furnace operators seeing the pace of weekly inventory increases becoming rapid, forcing discounted sales in major trading centres like the west.
Sources said that rebar trade prices have fallen by INR 1,100/mt ($13/mt) to INR 45,300/mt ($529/mt) ex-Mumbai and are down INR 300/mt ($4/mt) to INR 47,000/mt ($549/mt) ex-Chennai in the south.
Rebar trade prices have lost INR 1,000/mt ($2/mt) to INR 41,500/mt ($485/mt) ex-Raipur in the central region and are down INR 400/mt ($5/mt) to INR 41,000/mt ($479/mt) in the east.
“Since price losses are so big so early in the monsoon season, our assessment indicates significant more downside risks. Even the few engineering, procurement, construction (EPC) companies that are still active in supporting the market with small-volume bookings can be expected to exit the market and pause purchases for the next two to three months. Hence, we do not see the current level to be a bottom,” a Kolkata-based distributor said.
“Induction furnace operators can be expected to increase discounted sales as inventories rise. Furthermore, retail sales will also remain low as a result of liquidity challenges faced by small and medium-scale users,” he added.
$1 = INR 85.55