Local Indian tradable rebar prices have surged during the past week amid a rush by dealers to restock in reaction to early fears of a shortage emerging in the market, SteelOrbis has learned from trade and industry circles on Tuesday, March 16.
The source said that most dealers were reported to be rushing to build up inventories, fearing supplies may tighten significantly in view of reports of an indefinite strike notice given by workers at state-run Rashtriya Ispat Nigam Limited (RINL), a 7.3 million mt per annum exclusive long steel producer, to protest against the Indian government’s decision to privatize the company.
The sources said that, while it is still early to forecast definitively how long the indefinite strike would be prolonged or its impact on the market, the fact of supplies from one of the leading long product producers pulling out of the market has triggered a shortage scare across regional markets and panic restocking by intermediaries.
According to sources, primary and secondary producers have maintained rebar prices at INR 49,000/mt ($676/mt) ex-works. But tradable prices have surged amid large-volume fresh bookings. The tradable price of primary steel mills has moved up to INR 52,250/mt ($721/mt) ex-works compared to the traded price of around INR 50,250/mt ($693/mt) ex-works a week ago.
The traded rebar price of secondary steel mills is up to around INR 50,000/mt ($690/mt) ex-works, compared to INR 49,000/mt ($676/mt) ex-works a week ago.
“The depth of the impact of the closure of RINL is not clear yet. Right now, the impact is on sentiments. If the workers’ protest is prolonged, not only finished long product supplies to the market will tighten, but availability of billet will also drop, putting the production of secondary steel mills at risk,” a Kolkata-based long product dealer said.
“A price increase based on fundamentals of demand-supply is always a positive for the market. But disruptions owing to protests and forced closures of production facilities send wrong signals to both producer and consumers,” he added.
$1 = INR 72.50
