India: Rebar Price Gap Between Large and Medium Mills Increase in September

The rebar prices by the large mills have increased in Sep’18, however in the same duration the medium/small scale mills have slightly reduced or maintained the offers.

As per SteelMint assessment, rebar price gap between the large & medium/small scale mills is currently hovering at INR 3,500-4,000/MT (USD 48-62),increased as against Aug'18 at INR 1,000-1,500/MT (USD 16-24).

The prime reason behind the widened price gap between the both producers is constant rise in prices by large mills, which reported a surge of INR 1,800-2,200/MT in a month. However in same duration, the prices by medium/small mills in east & northern regions have declined about INR 1,000-1,500/MT, while in remaining markets it was more ore less firm.

Currently in Mumbai - large mills are offering rebar at around INR 43,500-44,000/MT, while by medium/small scale mills offer is at INR 40,000-40,500/MT. The prices are for 12-25 mm size, ex-work & excluding GST at 18%.

Similarly in Hyderabad - the large mills are offering rebar at around INR 43,300-43,800/MT, although the offers by medium & small scale mills stood at around INR 39,500-40,000/MT for the same size material.

Industry leaders believe that generally price gap between large scale and medium scale mills could be in the range of INR 3,000-4,000/MT depending on the location. If the price gap increases further, infrastructure companies or any end-users might consider medium scale mills to procure the material.

As per market participants, looking at continuous increase in iron ore, the large players (SAIL, Tata Steel RINL & JSW Steel, JSPL) are most likely to increase its long steel prices by INR 500-1,000/MT in starting of Oct’18. It is to be noted that SAIL has already announced 2nd price hike in September of INR 500/MT in Rebar on 21 Sept'18.