Price Gap between Indian Primary & Secondary Steelmakers Narrows Down

Rebar price gap between primary and secondary steel manufacturers has reduced to INR 1,500-2,000 /MT across India, which was earlier used to be INR 4,000-5,000/MT.

A big concern for secondary steel manufacturers, who are already struggling with lower margins and poor demand. It is noticed that price difference between primary and secondary manufacturers has narrowed down to INR 1,500-2,000/MT, which was used to be INR 4,000-5,000/MT earlier.

For instance, secondary manufacturers in Mumbai are offering 12 mm at INR 33,600/MT (including excise of 12.5%; VAT/CST extra). While, similar size is offered by primary manufacturers at around INR 36,000-36,500/MT (including Excise of 12.5%; VAT/CST Extra).

Similarly, primary steel producers are offering rebar at around INR 37,500/MT (Excise included; VAT/CST extra) in NCR/Delhi region. Whereas, secondary manufacturers are offering the same size material at INR 36,000/MT.

“Retail buyers are more inclined towards rebar produced by primary steel producers like Tata, JSW, RINL and SAIL. Price difference between secondary and primary are narrowing down”, said a retailer based in Mumbai.

Total rebar consumption in India is about 24 MnT pa, out of which, primary producers hold about 7 MnT pa and rest 16-17 MnT pa comes through secondary producers.

Few primary producers is going to ramp up their capacity for long products in the current fiscal year. This in turn may further put pressure on secondary steel manufacturers.

Domestic Billet & Rebar Prices

Basic prices as on 16 June’15; Excise duty & CST/VAT extra
#12 mm; *Ingot price
Source: SteelMint Research