India: Proposed 5% entry tax on Rebar in Maharashtra increases Offers

Maharashtra Rebar manufacturers increased offers after the announcement of 5% entry tax on long products but trade activity remained slow.

Rebar manufacturers in Maharashtra were relieved by the proposal of imposition of 5% entry tax on long products in the State Budget presented by the Finance minister on 18 Mar’15.

Neighboring states are likely to be in a position of disadvanatage after the imposition of entry tax, especially Chhattisgarh, which is the production hub of Rebar in central India. Chhattisgarh is also a major supplier of Rebar to Maharashtra, especially Vidarbha region.

Rebar offers increased by around INR 500-1,000/MT across Maharashtra in the last two days since the day of announcement of State Budget. It seems that Rebar manufacturers in the region are holding their stocks and are less keen to sell their material. They may take benefit after the final approval of imposition of entry tax probably next month.

Rebar prices in Raipur are hovering at INR 30,000-30,300 for 12 mm (basic price; Excise duty & VAT extra) which showed less movement in the current week as raw materials are stable.

As per a Rebar manufacturer in Maharashtra, “It is a positive step taken by the state government to encourage sales of long products from the state based steel industry.” He also added, “Currently around 50% of the plants are shut down in the state and the remaining are operating in single shifts. Manufacturers will increase production level if market supports”.

Weekly change of Ingot and 12 mm Rebar Prices

Basic Prices as on 20 Mar’15, Excise duty and VAT extra
Source: SteelMint Research