New Delhi, July 11 Indian primary steel mills are looking to hike rebar or reinforced steel bar and wire rod prices by around Rupee 1,000–1,500 per tonne, up by 3–5 per cent, over a month-on-month basis.
This is the first time, primary mills in the country are looking at a price hike post imposition of export duty in May, that saw steel prices – of both long and flat products – fall.
The increase in price comes on the back of improved / better demand specially across construction and real estate sectors and also higher stocking ahead of monsoon.
Reinforced steel bars (rebars) and wire rods are considered as long products.
Those aware said, two primary mills are looking at rebar prices (made through induction furnace route) to around ?59,000–61,000 per tonne while wire rod prices increase is in the range of ?61,000 per tonne (up by ?1,000 per tonne) for mid-July deliveries. Price hikes are expected to come into effect starting this week.
Spot rebar prices
Meanwhile, spot rebar prices are in the ?55,600 per tonne range, up 3 per cent from ?54,000 per tonne in the same period last month.
“There is enough indication that price of long products may stay supported in the near term due to distributor-level inventory depleting on account of pre-monsoon buying. And there is improvement in domestic demand which can sustain. So, we are anticipating prices to firm up,” a trade source said.
Secondary mills
Another factor, is the price hikes have also been initiated by the secondary steel mills, which comprise 60–65 per cent of the long steel market. Stiff raw material prices — high iron ore, pellet and thermal coal prices — have forced many of them to opt for production cuts because of which there is short supply.
Supply crunch in iron ore and pellets continue.
Many primary or Tier-I mills have also preponed maintenance shutdowns to July, which will decrease crude and finished steel supply. It is also likely to bring in a balance to demand–supply situation thereby allowing sustained hiked prices.
“If price hikes are made by the secondary mills, we generally get a scope to increase prices too. The new July prices should come into effect in a day or two,” a primary mill official said.
Rebar prices made through the blast furnace routes have remained flat on a 30-day basis, at around ?58,600-58,700 per tonne levels.
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