What Will be Indian Rebar Prices in July'19 - SteelMint Analysis

As per market review, trade volumes and inventory levels are major factors to be watch for near term to understand market direction.

As per participants, stock level with medium/small as well as large scale mills is considerably high in comparison to regular basis but there are anticipations that state owned large mills might roll over the prices for July'19 amid upcoming budget which is scheduled on 5th July'19.

The factors behind expected roll over finish long steel (rebar) prices is to watch trends with awaited budget whether the expenditure on infrastructure will get boost or remain the same.

It's being assumed among few players that existing governance will support steel industry through sufficient funds along with appropriate policies for infrastructure segment.

However looking at current situation they foresee that roll over prices may not support trades due to weak demand amid slow construction activities and another major concern is delayed payment cycle which notified by associate PSU's which had supplied material on credit basis, shared by sources.

Also selling pressure continues to remain high due to rising stock amid surge in production which moved up by 7.12% to 4.06 MnT in May'19 as against 3.79 MnT in Apr'19.

Further the increasing price gap between large and medium scale is another key factor which is indicating that prices should come down by around INR 1,000/MT (USD 14) next month. As per SteelMint assessment the current rebar price gap is hovering around INR 7,000/MT in Mumbai and Hyderabad & INR 5,000/MT in Chennai.

It would be interesting to see how the major mills decide for rebar prices in July.