Rebar offers fall by upto INR 3,100/MT M-o-M across Indian market.
Secondary rebar mills are operating below capacity across all Indian markets owing to adverse market situation. Continuous fall in prices, narrowed conversion margins from billet to rebar are some of the major reasons due to which production has been cut.
SteelMint surveyed various rebar manufacturers in few markets to assess the levels of capacity utilization of plants in the present market situation.
In Hyderabad, there are around 20 rebar makers, who have an average production capacity of around 250-300 MT/day. Here, major mills are running at around 50-60% capacity.
As per a semi-finish and rebar manufacturer based in Hyderabad, “We are facing a lot of pressure from the demand side as no major development activitiy is taking place.” He also added, “Our conversion spread has also reduced from INR 2,000/MT to INR 1,000/MT”.
In Wada, close to Mumbai, there are around 10 rebar mills that have a production capacity in the range of INR 300-500/MT including big and small mills. These are running at around 75% of the capacity.
As per a manufacturer based in Wada, “Rebar prices in Mumbai hit a 5-year low and there can be very limited downside from this level. Currently inventory is at a comfortable level.”.
In Raipur (central India), there are 20 major rebar mills including big and small, having production capacity from 300-700 MT per day running at almost 45-50%.
As per a billet and rebar manufacturer based in Raipur, “Presently, demand of finished steel is very weak and viability has became less from the neighboring states. He also said,,”Recent hike in power tariff by the state government of around INR 1/unit for all steel units has led to increase in cost of production”.
Indian Billet and Rebar Prices
|
Region |
City | Billet | M-o-M | Rebar# |
M-o-M |
| Central | Raipur | 22,350 | – 2,650 | 25,700 | – 2,900 |
| Eastern | Durgapur | 22,000 | – 3,100 | 24,700 | – 3,200 |
| Western | Ahmedabad | 24,300 | – 2,000 | 26,800 | – 2,700 |
| Mumbai | 23,600 | – 2,200 | 26,500 | -2,200 | |
| Jalna | 23,400 | -2,800 | 26,600 | – 3,000 | |
| Northern | Gobindgarh(MGG) | 25,500 | – 3,250 | 30,200 | – 3,100 |
| Southern | Hyderabad | 24,000 | – 1,000 | 27,000 | – 500 |
| Chennai | 24,000 | – 1,750 | 28,400 | – 1,600 | |
| Bangalore* | 24,550 | – 1,700 | 29,300 | – 600 |
Basic Prices as on 31 July’15, #=12 mm, *Ingot price
Excise duty, CST/VAT extra
Source: SteelMint Research
Leave a Reply