India’s large steel producers like SAIL, RINL, Tata steel, JSPL, JSW have increased price on backdrop of rising coking coal prices. Whereas small scale rebar manufactures (who produce steel through EF technology*) could not increase price due to low demand and poor financial liquidity.
At present, price gap between Indian Large and small scale rebar market exist at INR 3,000-5,000/MT which was last month was at INR 3,000-4,000/MT.
Presently, large scale manufacturer SAIL, RINL, JSW rebar offers 12-32 mm hovers at INR 35,000-36,000/MT (excise duty included, VAT/CST extra) for Mumbai and North India. While small scale rebar producers offers are at INR 32,000/MT ex Mumbai. Similarly price widen in South India (Ex Chennai) to INR 5,000/MT.
Large scale manufacturer as reported in the media are planning to raise price by up to INR 6,000/MT on Jan’17. However a distributor and trade source says it may be tough to increase prices at present level similar to flat steel.
“Flat steel product price got absorbed from last couple of months, but finish long prices are demand -based and post demonetization demand has not picked up yet” said a distributor located in Mumbai.
“Impact of demonetization is on retail sector (B2C) not much on B2B sales” said a retailer and stockiest located in North India.
Large scale producer has 33-35% production market share in finish long whereas small scale producer has 65% market share. If small scale producer does not support prices it may be difficult to close the gap from present level.
* Large scale producer produce steel through BoF route with coking coal and iron ore as major raw material whereas small scale produce steel through Electric furnace (Induction or Electric Arc Furnace) melting scrap and sponge iron.
B2B – Business to Business mostly stated for flat steel market as its supply is to automobile, manufacturing and white goods industry. B2C is for Business to consumers for Long steel industry as demand is chiefly from rural housing.
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