The local Indian rebar market has showed little material change over the past week with secondary producers bearing the brunt and seeing tradable prices fall sharply amid uncertainty surrounding retail sales to the housing sector and real estate developers maintaining a slow pace of resumption of projects, while primary mills are better placed, leveraging more favourable high-volume tender bids, SteelOrbis learned from trade and industry circles on Tuesday, June 29.
Sources said that, while prices of both primary and secondary producers have remained unchanged during the past week, secondary producers more dependent on retail sales have been facing resistance to high prices from real estate developers, while not having the pricing power to drive volumes into the market.
Sources said that primary rebar sellers have maintained prices at INR 55,000-56,000/mt ($742-756/mt) ex-works and tradable prices have been heard lower at INR 57,000/mt ($768)/mt ex-Mumbai, down from levels of INR 58,500/mt ($789/mt), ex-Mumbai a week ago.
Rebar prices of secondary sellers are heard at unchanged levels of INR 51,000-52,000/mt ($688-701/mt) ex-works, but tradable prices have fallen sharply to around INR 52,000-52,500/mt ($701-707/mt) ex-Mumbai in the face of buyers’ resistance to high prices, the sources said.
“Large real estate developers with projects in metropolitan cities are still able to restart work as they have better access to bank financing owing to their size. The biggest hit are real estate developers in Tier II cities,” a Kolkata-based real estate developer said.
“Banks’ funding to real estate developers is very stringent, particularly those with smaller balance sheets. Rising costs of steel and cement are a double whammy. Medium-sized developers are not able to increase the pace of project implementation even after the easing of lockdown restrictions. Most do not have the liquidity to restock raw materials,” he added.
However, at least two of eastern India’s largest long product distributors said that integrated steel mills are expected to increase rebar prices in July, at least in the range of INR 1,000/mt ($13/mt), more conservative than their aggressive pricing adopted for their flat product portfolio.
$1 = INR 74.20
