Indian domestic billet prices drop by INR 400-1,000/MT(USD 6-14) in last one month. Current prices for induction grade billet (which is more popular in merchant market) hovers at INR 32,600/MT (USD 466) ex-Mumbai.
Factors that are driving Indian billet prices down are:
1. Subdued demand in domestic market owing to lower number of government projects and liquidity issue.
2. Global billet prices have dropped due to supply/demand mismatch. Prices have corrected about USD 40/MT globally in last two months.
3. Indian billet exports have dropped owing to competitive offers from other countries. Export volumes have dropped by 37% in October.
4. Appreciating Indian currency does not support exports from India. Indian Rupee has appreciated 1.73% against USD in last one month.
5. Global scrap prices have dropped significantly by USD 15-20/MT in last one month.
6. Indian iron ore prices are under pressure on rising production. Prices have corrected by 20-25% in last one month. This has also led to fall in domestic sponge iron prices.
7. Billet exports from Iran at a competitive price is making way to global market despite US sanctions.
Monthly Average Prices as on 8th January 2019
| Particular/Delivery | Region | Currency | 8th Jan’19 | Nov’18 | Dec’18 |
| Billet | Ex-Mumbai, India | INR/MT | 32,600 | 33,750 | 33,350 |
| Ex-Raipur, India | INR/MT | 30,800 | 32,800 | 31,400 | |
| FOB India | USD/MT | 420 | 458 | 435 | |
| FOB Black Sea | USD/MT | 400 | 455 | 421 | |
| FOB Iran | USD/MT | 380 | 434 | 400 | |
| Ex-Tanghan, China (Incd 17% VAT) | USD/MT | 508 | – | – | |
| Sponge Iron (P-DRI) | Ex-Raipur, India | INR/MT | 18,500 | 20,800 | 20,000 |
| Scrap,HMS 80:20 | CFR Turkey | USD/MT | 280 | 332 | 297 |
| Scrap, HMS 80:20 | CFR India | USD/MT | 313 | 334 | 323 |
Source: SteelMint Research
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