Primary steelmakers in India have reduced prices in long products segment by Rs1,000-3,200/mt ($14-44/mt) for February deliveries, in line with continuous fall in secondary domestic market since last month, according to Davis Index’s sources.
State-owned company Steel Authority of India Limited (Sail) has reduced rebar prices by Rs1,000-1,500/mt ($14-20/mt) in retail segment. Another state-owned company, RINL, has cut prices by Rs1,000/mt for all long products. JSW Steel reduced rebar prices by around Rs3,200/mt ($44/mt) for the month.
This price correction comes after prices of long products rose by almost 50pc from August 2020 to Jan 2021.
Major infrastructure and construction companies in India were affected by the significant increase in finished steel prices which made projects unviable. Thus, this price correction was expected looking at the sharp drop in rebar prices by Rs7,000-8,000/mt ($96-110/mt) in secondary market last month.
Price gap unsustainable
With this, primary mills’ rebar prices are priced around Rs51,000-52,000/mt ($700-713/mt) ex –Mumbai while secondary producer’s rebar prices are hovering at Rs42,000-42,500/mt ($576-583/mt) in the same region.
Market participants opined that this substantial price gap between rebar from primary and secondary players seems to be unsustainable and it will come down gradually in future.
Meanwhile, international iron ore prices shot from $80/mt in April 2020 to $173/mt on Jan 21 2021, touching a nine-year high before softening to its current level of $156/mt.