Indian domestic rebar prices have fallen further with slowing demand as monsoon rains disrupt construction activity in some parts of the country.
Monsoon rain has hit the southern and western states of India, with cyclonic winds in some cases resulting in floods and disrupting transport and commercial activity. The rains are expected to hit north India by 3 July.
Although modern technology is now used in construction, building activity is halted frequently because of heavy rain that slows rebar sales, said a marketing manager with state-controlled steel producer Sail.
Inventories with trading firms have dropped by about 50-60pc as they are wary of stocking up too much, a Mumbai trader said.
Traded prices for rebar 12-25 mm fell by 4,000 rupees/t from the first week of June to Rs36,000/t ($522) today.
But large-scale integrated mills are holding on to offers of Rs40,500/t though secondary producers, which melt scrap or pig iron to produce rebar, at Rs32,000/t. Some east India-based secondary producers are offering rebar at Rs29,500/t.
Prices of secondary rebar is typically lower than primary rebar by Rs3,000/t. But weaker demand has led to secondary producers accept a wider discount to primary rebar prices since most of the secondary producers are smaller in size and not as cash rich as larger mills.
Demand is likely to remain subdued until the monsoon ends in September, exerting further pressure on rebar prices, said a JSW Steel executive.
