Lower trade volumes and high inventory levels have kept Indian domestic rebar prices under pressure and market participants are waiting to understand market direction.
As per trade participants, stock level with large scale mills is considerably high in comparison to regular basis but there are anticipations that state owned large mills as well as private large mills might roll over the prices for Sep’19 just to maintain the market sentiments.
However they are also assuming that internal rebate will continue to attract buying inquiries just to ease inventory level burden or might lower price further by around INR 1,000/MT (USD 14) across regions due to measured supply along with dull buying inquiries.
As per assessment, currently the large scale mills trade reference price of 12 mm rebar is hovering at INR 35,000-35,500/MT Ex-Hyderabad/Mumbai/Chennai and INR 33,500-34,000/MT Ex-Jharkhand, excluding 18% GST.
Recently central government announced to provide appropriate cash flow through banking channel but few participants expecting that it will take sufficient time to get benefited as NHAI/CPWD/PWD previous payments are still in queue and further ongoing projects will need additional support or timely payment.
Further, looking at current situation they foresee that roll over prices may not support trades due to weak demand amid slow construction activities and another major concern is delayed payment cycle shared by trade sources.
It would be interesting to see how the major mills decide rebar prices for in Sep’19.
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