As per SteelMint’s assessment, rebar price gap between the large & medium/small scale mills is currently at INR 2,500-3,500/MT (USD 35-50), which is more or less similar compared with previous month (Jan’19), considering Delhi/NCR & Mumbai location.
The key factor behind the not much change in price gap between them as both large and medium/small mills have increased offers in same proportion during Feb’19. Almost all large mills have hiked rebar prices by INR 1,000-2,000/MT in the month on account of revival in domestic demand as well as increase in iron ore prices. Few of large companies like – SAIL and JSW steel hiked prices twice.
Similar proportion rise being observed by medium/small scale mills at close to INR 3,000/MT in the first half of Feb’19 but thereafter it gradually moves\ down by almost INR 1,500-2,000/MT depending on the location as market didn’t accept the higher offer prices.
Currently in Mumbai – large mills are offering rebar at INR 40,800-41,200/MT, while offers through the medium/small scale mills stood at INR 38,100-38,300/MT. The prices are for 12-25 mm size, ex-work & excluding GST at 18%.
Similarly in Delhi – the large mills are offering rebar at around INR 40,500-41,000/MT, although the offers by medium & small scale mills hovering at INR 37,400-37,800/MT for the same size material.
What May Happen?
As per participants, all of large mills are set to boost output in the current quarter (Q4 FY19) which may result selling pressure with them. Meanwhile the producers are still looking for further rise in prices in early of Mar’19 on account of of healthy bookings from both – project as well as retail segments. Also major mills are holding significant inventories with them till Q3 FY19 which they are trying to liquidate in Q4 by also focussing in exports.
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