Price Conversion from Ingot to Secondary Re-bar has fallen by almost INR 700-1,000/MT owing to less Re-bar buyers.
Low demand of finished products from the end-users is building pressure on Re-bar offers. The prices in the current month have been continuously falling in almost all the regions especially Central & Western region, which has fallen drastically.
Prices has declined by almost INR 1,000/MT in major market like Raipur, Mandi Gobindargh, Durgapur and Jalna in the last one week.
Currently, Raipur & Mumbai offers Re-bar at INR 33,300-33,500/MT (28 mm), and INR 34,000-34,200/MT (20 mm) respectively.
Raipur is offering Ingot at INR 30,100/MT, while Mumbai offered at INR 30,800/MT on Ex-Works basis.
Conversion Spread reduces due to following reasons:
- Re-bar demand has reduced drastically
- Secondary Re-bar prices have fallen more as compared to Ingot & Billet prices
Due to low conversion spread, the Re-bar units’ are already cutting their production levels so that they can manage their inventory. The production cut has resulted in lower availability of Re-bar in the domestic market, which is likely to support prices in near future.
It is anticipated that the primary Re-bar producers will correct its prices in the upcoming months by around INR 500-700/MT owing to slowdown in construction activities. The construction sector consumes 60% of the total steel demand.
“Currently, the conversion spread from Ingot to TMT in Raipur has reduced to INR 1,800-2,000/MT, which were earlier at INR 2,500-3,000/MT. This has forced few Re-bar unit to temporary shut down and some has gone for maintenance,” according to one of the manufacturers based at Raipur.
As per some of the traders at Mumbai, “There is pressure on Secondary Re-bar prices and it will continue till this quarter-end of FY15”.
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