Rebar, the major consuming product is currently not in good demand in Indian market. Since the monsoon has started, the Rebar’s domestic demand & prices continue to remain under pressure even though the raw material like billet offers are on higher side globally.
The stand alone re-rolling mills in major regions of the country is continuously reducing the production because of the higher input cost relatively lower margins from billet to 12mm rebars.
The halt in the production is also owing to the fact of increased inventories with the manufacturer’s till the stock gets cleared.
The average conversion required from billet to 12mm rebars is INR 3,500-4,000/MT for the stand alone re-rolling mills which has been reduced to INR 2,500-3,000/MT across major regions of the country like Central, East & West regions of India.
An official from the Integrated plant in Central Region – Raipur whose production capacity for long steel about 0.20 MnT per annum stated that, “We have reduced the production for rolling products almost by 40% as the conversion is not favorable from billet with lull demand for the rebars”
He further added that the demand might improve with the end of the month as the monsoon will slow down its effect and the halted construction project might reinstate.
Other small rolling mills have also followed the suit and have cut the production owing to low demand from construction sector and poor conversion margins majorly in Central, East and West Regions of India.
Source: SteelMint Research
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