A
labourer marks steel bars at a steel and iron factory in Huai'an, Jiangsu
province, in this February 18, 2008 file photo. China expects to lay off 1.8
million workers in the coal and steel sectors as part of its efforts to reduce
industrial overcapacity, an official at the human resources and social security
ministry said on February 29, 2016. REUTERS/Patty Chen/Files | Photo Credit:
PATTY CHEN
This
is the first time since May that some primary mills have increased rebar and
wire rod prices
New Delhi, July 11 Indian primary steel mills are looking to
hike rebar or reinforced steel bar and wire rod prices by around ₹1,000–1,500
per tonne, up by 3–5 per cent, over a month-on-month basis.
This is the first time, primary mills in the country are looking
at a price hike post imposition of export duty in May, that saw steel prices –
of both long and flat products – fall.
The increase in price comes on the back of improved / better
demand specially across construction and real estate sectors and also higher
stocking ahead of monsoon.
Reinforced steel bars (rebars) and wire rods are considered as
long products.
Those aware said, two primary mills are looking at
rebar prices (made through induction furnace route) to around ₹59,000–61,000
per tonne while wire rod prices increase is in the range of ₹61,000 per tonne
(up by ₹1,000 per tonne) for mid-July deliveries. Price hikes are expected to
come into effect starting this week.
Spot rebar prices
Meanwhile, spot rebar prices are in the ₹55,600 per tonne range,
up 3 per cent from ₹54,000 per tonne in the same period last month.
“There is enough indication that price of long products may stay
supported in the near term due to distributor-level inventory depleting on
account of pre-monsoon buying. And there is improvement in domestic demand
which can sustain. So, we are anticipating prices to firm up,” a trade source
said.
Secondary mills
Another factor, is the price hikes have also been initiated by
the secondary steel mills, which comprise 60–65 per cent of the long steel
market. Stiff raw material prices — high iron ore, pellet and thermal coal
prices — have forced many of them to opt for production cuts because of which
there is short supply.
Supply crunch in iron ore and pellets continue.
Many primary or Tier-I mills have also preponed maintenance
shutdowns to July, which will decrease crude and finished steel supply. It is
also likely to bring in a balance to demand–supply situation thereby allowing
sustained hiked prices.
“If price hikes are made by the secondary mills, we generally
get a scope to increase prices too. The new July prices should come into effect
in a day or two,” a primary mill official said.
Rebar prices made through the blast furnace routes have remained
flat on a 30-day basis, at around ₹58,600-58,700 per tonne levels