India's SAIL Hikes Rebar Price for 2nd Time in February - Sources

Following hike in rebar prices in secondary market and expectations of strong domestic demand in the current quarter (Q4 FY'19), few of the major Indian mills are likely to hike long steel prices further this month. SAIL has recently announced hike in prices for 2nd time in this month.

As per sources revised prices for 12 mm Rebar is around INR 39,800-40,300/MT (ex-Mumbai, GST extra) which was around INR 39,300-40,700/MT a week ago.

In the beginning of the month, SAIL under Ministry of Steel has already announced increased prices in rebar by INR 300-500/MT for February.

So far in the month, rebar prices in secondary market increase by about INR 2,000/MT in Raipur, about INR 1,500/MT in Mumbai, Chennai & Mandi Gobindgarh and INR 1,700/MT in Durgapur.

SAIL conducted conference call yesterday for the Q3 FY19 results, some of the major highlights are as follows:

1) Company's saleable steel production target to to 15 MnT in FY19- Company is targeting Saleable steel production close to 15 MnT in the financial ending (FY19) and in FY'20 its target would be close to 17 MnT and FY20 would be 20 MnT. In the previous fiscal year FY19, its saleable steel output was about 14.1 MnT.

2) BRM Mill (Bhilai) to increase production: Company has started production from its new bar and rod mill from Bhilai unit and and will also ramp up the production in the next financial year FY20. As per the company website, its production capacity is 0.9 MnT per annum

3) Domestic demand to be Good: Company's is expecting domestic demand to be very good in the next two months i.e. Feb and Mar'19. In turn, domestic steel prices to remain firm. Though our focus will be both in domestic and export market as well as in value added products.