- Primary producers raise project offers by INR 1,000-1,500/t
- Maintenance outages and lower output tighten supply outlook
The sharp correction in India’s blast furnace (BF)-route rebar prices may be nearing a floor, supported by a gradual improvement in infrastructure-led procurement, better project order bookings, firmer pricing by the primary producers, and some signs of supply-side discipline. While spot demand continues to be largely need-based during the monsoon season, relatively healthier mill order books and improving project execution have reduced the pressure on suppliers to offer aggressive discounts, suggesting that market sentiment is showing early signs of stabilisation.
Prices show signs of bottoming out
BF-route rebar prices corrected by INR 6,000-9,100/t about (11-17%) over the past two months on subdued demand, elevated distributor inventories and competitive pressure from lower-priced IF-route material following declines in billet and sponge iron prices. Aggressive pricing by secondary producers and cumulative price reductions by primary producers further weighed on market sentiment. However, improving project demand, stronger mill order books and higher project offer prices indicate that the market has begun to stabilise. Healthy infrastructure execution is gradually restoring pricing confidence, reducing the need for further discounts.
Project demand improves pricing confidence
Over the past few weeks, primary producers have witnessed a notable improvement in project bookings, with landed BF-route project offers currently being concluded at INR 48,000-49,000/t, compared with booking levels as low as INR 46,500/t during the recent correction. According to market participants, several producers have increased project offer prices by INR 1,000-1,500/t, reflecting stronger order visibility rather than speculative price hikes.
The BF-IF route-rebar price gap has narrowed in recent weeks, improving the competitiveness of BF-route rebar. Meanwhile, project-side demand among secondary producers remains moderate to healthy, with some players reporting strong project order books and improved production visibility, while others continue to witness relatively weaker bookings owing to uneven regional demand.
Industry sources indicate that project order books with the primary producers now extend beyond one month, with cumulative confirmed project volumes exceeding 300,000 t. Around 70% of the monthly project allocation has already been booked, reflecting healthy order visibility. This has improved production planning and reduced mills’ dependence on spot market sales.
Primary producers continue to prioritise project sales, with 60-70% of rebar volumes supplied to infrastructure and institutional projects, while the remaining 30-40% is sold through the retail channel, reflecting sustained project-led demand.
Govt infrastructure execution strengthens steel procurement
The improvement in order visibility suggests that infrastructure and institutional projects continue to absorb material despite monsoon-related disruptions, enabling producers to gradually raise prices.
Government infrastructure execution remained strong during June-July 2026, with 80+ projects worth INR 1.7 lakh crore progressing, including over INR 85,000 crore in roads and highways. Despite monsoon-related construction disruptions, ongoing project execution continued to support rebar procurement and kept project-led steel demand resilient.
Planned mill maintenance tightens supply outlook
Supply from the primary steel sector is expected to remain constrained as several producers are undergoing or have scheduled maintenance shutdowns during August. A south India-based PSU steelmaker has remained under maintenance for over a month, while another PSU steelmaker is expected to commence a planned shutdown in early to mid-August. In addition, some primary producers are prioritising other long steel products, undertaking maintenance at select facilities.
The combination of maintenance shutdowns, lower production at select facilities and improving project bookings is expected to reduce spot availability over the coming weeks, limiting the likelihood of another sharp correction in primary rebar prices.
Spot demand cautious but downside risks limited
Despite improving project activity, overall consumption remains moderate as monsoon-related disruptions continue to affect construction activity across several regions. Retail procurement remains largely requirement-driven, with distributors continuing to avoid significant inventory accumulation.
However, market participants noted that the recent correction has improved the competitiveness of BF-route rebar relative to several other steel products, encouraging fresh project buying at current price levels. As project allocations increase and mill inventories decline, sellers are gradually regaining pricing confidence.
Outlook
The recent increase in project offer prices reflects improving market fundamentals rather than speculative buying. Robust infrastructure execution, healthy project order books, lower mill inventories and planned maintenance shutdowns have reduced the pressure on primary producers to offer aggressive discounts.
For August, the downside risk to BF-route rebar prices appears limited, while the likelihood of a gradual price increase has strengthened, supported by healthy project demand, tighter supply and lower mill inventories.
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