Domestic rebars prices saw mixed trends across various markets this week. BF-route rebars (12-32 mm) were assessed at INR 55,500-56,500/t ($674-686/t). Prices are exy-Mumbai, excluding GST @ 18%. Prices are likely to stay range-bound in the current month.
Why are trade prices likely to remain range-bound?
1. Limited restocking in October: Restocking activities have been slowed down towards mid-October amid moderate demand from end-users. Moreover, most of the restocking at distributor level was completed by end-September amid anticipation of a price increase by mills for early-October sales. Also, buying interest is likely to remain weak as most of the buyers have sidelined themselves ahead of the Diwali festival.
2. IF route rebars trade prices remain stable in second week of October: The induction furnace (IF)-route rebars prices remained largely stable in the second week of October amid need-based buying. SteelMint’s IF route rebars (12-25mm, Fe 500, IS 1786) prices stood at INR 55,700-56,100/t ($676-681/t) exw-Mumbai as on 14 October 2022.
Moreover, the gap between IF-BF route rebar prices has narrowed down to around INR 500/t ($6/t) as compared with INR 1,000/t ($12/t) seen in September 2022.
3. Inflationary pressure keeps demand lukewarm: Unlike the last festive season, this October, end-users remain pessimistic as consumer inflation spiked more than expected to a 5-month high of 7.4% in September while the industrial production data contracted for the first time in 18 months, declining 0.8% in August from a year earlier. With no respite from inflation, the RBI may increase the repo rate by another 50 bps in December which will further dampen end-user buying sentiments as retail loans will get costlier.
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