India steel: Rebar prices little changed

Indian rebar prices remained flat over the past week amid sluggish demand from the construction sector.

Most main steel mills had raised domestic rebar offers in the first week of January by 3,000-4,000 rupees/t ($42-56/t), in anticipation of rising demand from publicly funded infrastructure projects.

Infrastructure spending in India by central and state governments and the private sector is projected to total around Rs19.5 trillion rupees in the 2020-21 fiscal year starting 1 April compared with forecast spending of Rs13.63 trillion in 2019-20.

But the implementation of these infrastructure projects continues to be delayed because of a lack of funds. The average period for completing an average Rs1bn project was around 17 months for the quarter ended December 2019 compared with 11 months in the quarter ended September 2016, according to private-sector think-tank the Centre for Monitoring Indian Economy.

Orders are coming in but volumes are not very large, said a Chennai-based trader. Other traders expect mills to cut prices as consumer demand is not showing any sign of increasing.

The Argus-assessed price of rebar of 8-12mm thickness produced by the main integrated steel producers was unchanged from the previous week at Rs38,000/t. The price of rebar produced by melting steel in electric arc furnaces dropped by Rs1,500/t to Rs35,500/t.

Trading activity will likely be subdued in the next week as several market participants take holidays during the Hindu festival of Sankranti celebrated over 10-17 January.