Prices of Thermo-Mechanically Treated (TMT) rebars, a key construction material used in building, bridges, and infrastructure projects, have dropped to around Rs 50,000 per tonne, the lowest level in about six months.
The decline is largely attributed to weak demand during the ongoing monsoon season, when construction activity typically slows down across most of the country. The last low was witnessed in December when TMT rebar prices were around Rs 49,000 per tonne.
"Blast Furnace route or BF route rebar prices have corrected sharply and are at a six month low," markets research firm BigMint said in a report.
The report identifies several reasons behind the decline. It states that heavy rainfall has disrupted construction work across many states, reducing the demand for steel rebars. Road construction, bridge works, pipeline laying, and other government and private infrastructure projects have slowed because of weather related disruptions.
The report also states that developers and contractors are purchasing only what is immediately required instead of stocking up, putting further pressure on the prices. Mills and traders continue to hold ample inventories, creating excess supply in the market.
Industry analysts expect the prices to remain subdued for the rest of the monsoon season. A sustained recovery is likely to depend on the resumption of construction projects and stronger demand from the housing and infrastructure sectors once weather conditions improve. However, if the demand remains weak even after the monsoon, prices could stay subdued for a longer period.
TMT rebars are the primary steel reinforcement bars used in residential, commercial, and infrastructure construction. Their prices are closely watched because they influence the cost of housing, roads, bridges, and public infrastructure projects. Lower steel prices can reduce construction costs for developers and government agencies but may weigh on the profitability of steel manufacturers.
(With PTI inputs)
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