Conversion cost from Sponge iron to MS Ingot and Billet increases from INR 8,000-9,000/MT owing to increased demand of commodity from Rolling Mills.

Improved buying of Re-bar across the country has pushed up the demand of Semi Finish material (MS Ingot/MS Billet), which in turn has supported manufacturers to increase the MS Ingot/Billet prices.

This has made the situation very lucrative for Semi Finish manufacturers as they are still able to benefit owing to stable prices of the raw material (Sponge iron).

[su_quote] “We arrive at conversion after subtracting raw material cost from the cost of final production. In this sense stable price of Sponge iron is the only reason why the conversion for semi-finish manufacturers has stretched. High production of Sponge pellet is considered as the major reason behind stable Sponge iron prices which will also have its effect on narrow price movements”, said sources in conversation with SteelMint.[/su_quote]

This has to continue to increase the gap between Sponge and Ingot prices.

According to market players, last 2 months were lucky for Ingot manufacturers and this will continue in coming days also. Increase in the conversion cost by nearly INR 800-1,000/MT from Sponge to Ingot has encouraged manufacturers to increase production which has resulted to raise production of Ingot/Billet by 20-40% across the country.

Conversion Table for Sponge Iron to MS Ingot & MS Ingot to TMT (Re-bar)

In Durgapur, Re-bar prices of 12 mm are hovering at around INR 38,400-38,500/MT. In last 2-3 days, the manufactures have sold nearly 1,000-1,100 MT of material (Re-bar) in local market and in nearby states. Manufacturers are of the view that if same demand continues in coming days there are chances of hike in Re-bar and Ingot prices.