Limited construction and infrastructure activity amid the monsoon season has kept Indian rebar prices unchanged, with lower supplies offsetting the lack of demand.
Ex-Delhi prices for 12mm thick blast-furnace grade rebar remained unchanged from two weeks earlier at 52,000 rupees/t ($706/t), excluding goods and services tax, while prices of scrap-melted rebar also remained steady over the same period at Rs46,500/t.
“Prices of all infrastructure-related raw materials are high. Only buyers who have pending projects are purchasing rebar, otherwise normal infrastructure projects are very slow,” an east India-based trader said.
Blast-furnace grade rebar prices are 35pc higher on the year.
Demand has also taken a hit because of the beginning of Shradh, a two-week period during which people refrain from starting new projects, market participants said.
But the lack of demand has been countered by continued lower supplies in the market.
“My monthly offtake was about 500-600t, but [for the] last couple of months I am getting only 400-450t. Earlier the steel company workers used to increase [the] sales target for us each month, but that’s not the case anymore,” a north India-based distributor said.
Participants are now awaiting the end of the monsoon season to get clarity on demand, while uncertainty remains over whether consumption will pick up during the upcoming festivals of Dussehra and Diwali.
Higher costs of transporting recycled materials are also hurting scrap-based producers’ margins, a secondary producer said. About 60-65pc of the long steel produced in India is through the secondary route.
Indian domestic hot-rolled coil (HRC) prices were at Rs64,000/t on 17 September, up by 56pc from a year earlier, while the daily Asean HRC index was at $881/t yesterday, up by 69pc on the year. The spread between domestic rebar and HRC prices stands at about Rs12,000/t.
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