Prices of long product benchmark rebar, mainstay of India's secondary steel sector, have been on down ward path for last 12 months but the malaise has deepened in October-December quarter during which prices dipped by about 5-7% at most locations except for Western India and Delhi NCR

While the recovery in prices in West was due to hike in power tariff, the story in Delhi NCR is quite interesting

During Week 02 of 2015, rebar prices had weakened at most places in India. Ahmedabad -425, Chennai -180, Goa -85, Hyderabad -400, Kolkata -500 and Mumbai -100. Prices remained unchanged at Indore, Kanpur, Ludhiana, Mandi, Raipur, Rourkela and Rudrapur. However, the rebar makers in Delhi NCR hiked rebar prices by INT 650 per tonne WoW to climb back to INR 38430 per tonne levels

It was anticipated that correction would be announced by Delhi NCR rebar makers in Week 03 to simulate demand. On expected lines price reduction of INR 700 per tonne was announced on Monday to bring down price to INR 37730 per tonne plus ED & VAT

This type of pricing policy, adopted for last 12 months, has yielded excellent results for rebar makers in Delhi NCR who are able to achieve much better realization of at least about INR 3000 per tonne as compared to their peers countrywide. In fact rebar prices in last quarter at Delhi NCR have been maintained despite sluggish demand and slide in pencil ingot prices

The table exhibits the above mentioned trend quite clearly. The current prices of rebar at Delhi NCR are higher by about

Kolkata - INR 7300

Raipur – INR 5300

Mandi Gobindgarh – INR 2000

Historically, Mandi prices used to be the highest as it is the farthest point from iron ore producing region as well as from sea shores