Primary Long Steel Producers Increase Offers Thrice in Feb’16

Steel giants like RINL, SAIL and Tata Steel have surged rebar offers further in the range of INR 500-2,000/MT.

Indian primary rebar producers have increased offers thrice since the starting of the current month. Recently, SAIL, RINL and Tata Steel have increased offers by INR 500-2,000/MT, as per sources. Earlier during 8-11 Feb’16, the companies had increased offers in two slots by around INR 2,000/MT for both rebar and wire rod.

Major factors of rise in prices

1)In general, the manufacturers raises price of long products including rebar and wire rod during Jan-Mar period as this is the peak time for construction activities.

2)Prices had touched the bottom level in Dec’15 as primary producers had continuously decreased rebar offers during Jul’14 to Dec’15 by around 35-40% on adverse market conditions.

3)In the month of Nov or Dec’15, there was hardly any price gap between primary and secondary rebar players, which used to be a gap of INR 3,000-5,000/MT earlier depending on the brands. It means there was sufficient scope for primary players to increase offers.

4)In addition, the goverment took action on MIP imposition on various steel products and more focus on infrastructure sector in the upcoming union budget 2016. This in turn has lifted the market.

5)Globally, rebar and wire rod offers have also started to move up by USD 10-15/MT, especially in China since the starting of Jan’16 after a prolong downturn.

As per a large dealer based in Chennai, “RINL (Vizag Steel) increased rebar and wire rod prices third time by INR 500/MT and INR 1,000/MT respectively w.e.f 23 Feb’16. Earlier on 8 Feb’16 and 11 Feb’16, it had increased offers by INR 750/MT and INR 500/MT respectively.

However, the company had also surged offers for 16 mm by INR 1,000/MT in Feburary starting. Similarly, wire rod offers also went up by INR 1,200/MT and INR 800/MT on the same respective dates.”

Another dealer based in Chennai shared, “Steel Authority of India Limited (SAIL) increased rebar offers by INR 500/MT on 20 Feb’16 and INR 1,000/MT on 8 Feb’16 and INR 650-800/MT on 11 Feb’16, depending on the location.”

Presently, primary players offers for 12-32 mm rebar are assessed at around INR 33,500-34,000/MT (excise duty included, VAT/CST extra) in retail segment in Chennai.

Another dealer based in Mumbai shared,“Tata Steel has increased rebar offers by INR 2,000/MT yesterday and earlier also raised by INR 1,500-2,000/MT.

Price gap between primary and secondary producers

Currently, primary manufacturers are offering rebar in the range of INR 34,000-36,000/MT (excise duty included, VAT/CST extra) for 12-32 mm in retail segment in Mumbai. While, secondary rebar producers are offering the same size material at around INR 31,500/MT.

Primary producers’ rebar offers for Feb’16

Prices are including excise duty; VAT/CST extra
Source: SteelMint Research