Price gap between small and large Indian rebar producers narrows to 6-month low

Tuesday, 15 October 2019 11:49:10 (GMT+3)   |   Kolkata

Indian local rebar (TMT) market has indicated diverse trends during the past week, with small and medium scale producers lowering their domestic rebar prices, while large producers, mostly integrated steel mills were trying to increase prices resulting in a near 6-month low in price differentials between rebar produced by these two different sectors, SteelOrbis learned.

According to market sources, small and medium scale rebar producers have lowered their prices by INR 250/mt ($3.5/mt) to INR 32,200/mt ($452/mt) ex-stockyard. In contrast, large rebar producers, mostly integrated steel mills, have attempted to push up prices by INR 100/mt ($1.4/mt) to INR 32,350/mt ($454/mt) ex-stockyard.

The sources said that the narrowest price differential, the smallest over the past 6 months, indicated that producers struggling with their pricing strategy in the midst of sustained demand recession and market disappointment for the lack of any demand from either retail buyers or large construction projects.

“Clearly retail buyers maintain their cautious stance and construction activity of housing remains slow. At the same time, large rebar producers are trying to push prices higher to try and offset their higher cost of production and since they sell branded rebar entail higher marketing and sales costs,” an eastern India-based trader said.

“It has become clear to the market that the government is not going to increase its spending on large projects in view of tight fiscal situation and lower collection of taxes. Under circumstances, large rebar producers are caught in a bind of lower supplies to government funded projects and bear higher cost of production and marketing at the same time,” the trader added.

Market sources said that large steel mills like Rashtriya Ispat Nigam Limited (RINL) and JWS Steel have submitted rebar export offers ranging at $430-440/mt FOB, almost same as in earlier weeks but no deals have been concluded during the past week in key markets of Southeast Asia.

$1 = INR 71.23


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