Indian rebar manufacturers increased offers up to INR 2,500/MT during Nov’16 in secondary market. Prices were hiked also in Oct’16 by INR 1,000/MT.
Indian rebar manufactures based in secondary market has increased offers by 3-6% (INR 700-2,500/MT) during Nov’16. Major Price hike is seen in South India specifically in Hyderabad by INR 2,500/MT followed by Central and East India by INR 700-800/MT in the same duration.
Reason behind Price Surge
1)Domestic steel producers in secondary market has forcefully cut production by almost 50-70% depending on the region after the government move on demonetization of high currency notes on 8 Nov’16.
2)Steel price hike is largely expected by all top Indian steel producers during Dec’16 and RINL increased by INR 1,500/MT. Where the secondary market was aware in the mid of Nov’16.
Demand hit post demonetization
Cash crunch is faced by all market participants whether traders/stockiest/end-users after the government move on demonetization which hit steel demand across India especially rural areas.
Indian billet and rebar prices as on 1 Dec’16
| Region | City | Billet | M-o-M | 12mm Rebar | M-o-M | Monthly Average rebar prices (Nov’16) | Monthly Average rebar prices (Oct’16) | % Change | Monthly Average conversion spread (Nov’16) | Monthly Average conversion spread (Oct’16) | % Change |
| Central | Raipur | 22,400 | 100 | 25,400 | +800 | 24,900 | 24,200 | +2.9% | 3,000 | 2,600 | +15% |
| Eastern | Durgapur | 22,300 | 300 | 24,500 | +700 | 23,800 | 23,900 | -0.4% | 2,200 | 2,000 | +10.% |
| Western | Mumbai | 24,000 | 800 | 27,300 | +1,100 | 26,900 | 26,000 | +3.5% | 3,300 | 3,100 | +6.5% |
| South | Hyderabad | 24,500 | 1,500 | 28,500 | +2,500 | 27,000 | 25,500 | +5.9% | 3,300 | 2,900 | +13.8% |
Basic prices in INR/MT; excise duty and CST/VAT extra
Source: SteelMint Research
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