Mills in Kutch, Gujarat have reduced their rebar offers by around Rs1,200/mt in the last two days due to a slump in domestic demand as per Davis Index sources. The bi-weekly index for rebar fell by Rs1,000/mt from the prior Thursday to Rs33,900/mt ($460.09/mt) ex-works Kutch.
Traders in Ahmedabad state sales for the last three days are close to nil with buyers adopting a wait-and-watch approach. Mills are also offering a discount of Rs100-300/mt, depending on the quantity to boost trades.
Demand for flat steel products such as hot and cold-rolled coils (HRC and CRC) are comparatively better aided by the automobile sector, which is on the mend as the country goes into unlock mode. The demand for long products such as rebar, however, is unable to pick up with construction activities remaining slow in the monsoon months.
Mono Steel in Kutch thus intends to sell billets in the export market to offset weak domestic demand. Recently, the company also secured an export order for 10,000mt 100/130/150 cross-section billets of 6-12 meters length at $475/mt cfr Africa, as per sources in the company.
Last week, RINL a primary steel mill sealed a deal for 30,000mt CC billets at $425 fob India on an advance payment basis, equivalent to $428/mt fob on an LC basis. The material is likely to be shipped to Southeast Asia.
Steel mills in Kutch have a monthly billet and rebar production capacity of around 125,000mt and 75,000mt, respectively.
The Gujarat steel industry believes demand will bounce in the upcoming days. Most mills are waiting from the state government to infuse liquidity and the private sector to increase investments in various infrastructure projects to push the economy.
($1=Rs73.66)