This week, Indian rebar prices experienced a slight rise, driven by an increase in market inquiries as activities gradually normalize post-New Year holidays.
Price Adjustments by Producers
Major producers, including JSW and SAIL, have raised rebar prices by INR 500-1,000/t ($6-12/t). However, distributors have not yet passed these price hikes on to customers. For 12-32mm IS 1786 Fe 550D grade rebar, prices were reported at INR 52,000-52,500/t ex-Mumbai, while in the secondary market, 12-25mm IS 1786 Fe 500D grade rebar remained stable at INR 43,200-43,400/t ex-Raipur.
Rising Demand and Market Sentiments
A trader based in Mumbai mentioned that increased inquiries from government infrastructure projects and the housing sector are driving the market. “Demand is better compared to last month, and we expect prices to remain steady throughout January,” the trader noted.
At the same time, manufacturers are facing profitability challenges as billet-to-rebar conversion margins have dropped to below INR 2,500/t from the earlier range of INR 3,500–4,000/t. High indirect costs are further compressing margins, leading some manufacturers to anticipate potential price increases in the coming weeks.
Impact of December’s Tepid Demand
December 2024 saw a significant decline in demand, putting downward pressure on prices. New project announcements fell by 22% year-on-year, dropping to INR 6 trillion, while the value of completed projects plunged 52% year-on-year, settling below INR 1 trillion ($11.3 billion). Both figures remain below pre-pandemic levels, reflecting the challenges in project investments.
Outlook
While the market has shown signs of recovery with increased inquiries, rising costs and compressed margins could push prices higher in the near term. However, demand from key sectors such as housing and infrastructure may help stabilize the market in the short run.
