India: Increasing Freight hits North India Semi-Finish purchasing

SteelMint learned that in last two weeks freight charges have increased by 10-12% that hit North India Semi-finished purchases from other states. Sluggish supply has also supported the domestic prices of MS Ingot/Billet.

West Bengal: Majority of the Semi-finished materials from Durgapur (West Bengal) are sold in Mandi Gobindgarh (Punjab) (SteelMint assessed an estimated 20% of overall production is being consumed in North India). However, recently increased freight charges have pulled down the supply to Mandi.

A trader at Mandi said, “Previously we would purchase Billet from Durgapur at a freight INR 2,300/MT but now it has increased to INR 2,700/MT due to rising diesel prices and low availability of vehicle.” He added Ex works price in Durgapur remained same (INR 28,600/MT) as for now, but FOR is increased by INR 400/MT i.e. as on December 1st week, FOR Mandi was at INR 31,500/MT but today it is at INR 32,000/MT.

Central India: Raigarh to Ghaziabad freight was at INR 2,100/MT now it’s at around 2,400-2,500/MT. A North India broker said, “We are ready to pay the increased freight, but at this rates we won’t find any vehicles. The reason being, it’s repining season of Paddy and most of the vehicles are engaged on agriculture transportation. The shortage might continue till Jan’14 and we may see less material coming from Raipur and Raigarh to North India”

Similarly, Raipur Billet are majorly sold to Jalna based market in Maharashtra. Previous freight from Raipur to Jalna was at INR 1,300-1,400/MT now the freight is at INR 1,500-1,600/MT, almost INR 100-200/MT high from previous. As a result, buyers from Jalna are not interested in purchasing due to low viability.

                                                             Freight Table