Signals of a trend reversal have emerged in the local Indian rebar market over the past week, with large integrated steel mills continuing to lower prices, while secondary producers were seen to be attempting to nudge up prices in anticipation of the resumption of demand in rural and semi-urban markets, SteelOrbis has learned on Tuesday, June 9.
While the overall rebar market continued to remain in a negative zone, large producers have been forced to continue to reduce prices as bookings from large infrastructure projects have remained minimal since most construction companies are unable to increase project implementation in the face of the acute labor shortage across the country.
On the other hand, secondary steel mills have increased prices modestly as most producers felt an increase in rural and semi-urban projects with various state governments beginning to ramp up housing, road, bridge and irrigation projects in such areas to open up employment opportunities to local populations.
Market sources said that the failure of large projects to pick up pace has forced integrated steel mills to lower rebar prices by INR 1,000/mt ($13/mt) to INR 37,000/mt ($490/mt), ex-stockyard.
In contrast, secondary rebar producers in small and medium-scale sectors have increased prices by INR 500/mt ($7/mt) week on week to INR 31,000/mt ($410/mt) ex-stockyard. In select regional markets in a few states in the north and east rebar prices have moved up higher to INR 31,800/mt ($421/mt) ex-stockyard in reaction to higher bookings by various state-level agencies which had increased the pace of rural development projects.
“For integrated steel mills, big infrastructure projects will increase long product demand. But big project implementation is yet to get underway seamlessly as most construction companies are facing challenges of logistics and labor,” an official at Rashtirya Ispat Nigam Limited (RINL), an exclusive long product producer, said.
“We expect large infrastructure projects and hence demand for rebar to revive only toward the close of the second quarter and we are adjusting our production accordingly too and have enough rebar inventories to meet supplies in the interim,” he added.
$1 = INR 75.50