SteelMint in discussion with manufacturers of Sponge Iron, MS Ingot & TMT assessed that there are less probability of major downfall at current prices.
- In a month, Sponge offers raised by INR 500-1,000/MT across India. Price gap in Sponge iron and Sponge pellet is stable at INR 1,400-1,500/MT that indicates firm buying
- Dubai HMS offers up by USD 25-28/MT (INR 1,500-1,700/MT) in M-o-M
- MS Ingot offers at pan India escalated by INR 1,000-2,000/MT in Apr’14
Market likely to Stable with no Major Fluctuation for short term – Why?
High Raw Material Prices: High Sponge prices at pan India owing to scarcity of Iron ore and increased ore prices are supporting high Ingot/Billet offers. Iron ore prices raised by INR 300-600/MT in M-o-M. Shortage of imported Scrap strengthens prices of Ingot/Billet & Re-bar. In a month time, offers of imported Scrap shot up by USD 10-20/MT (INR 600-1,200/MT). Pig iron prices are also hovering in the range of INR 200-400/MT with good demand.
Low Inventory: Manufacturers of semi finish & finished steel are in cheers because of low inventory in plants. Robust sales in previous days have cleared the stock of semi finish & finished steel products and there is no selling pressure on manufacturers. It is also heard that volatile demand in Re-bar results in advance booking of semi finish products.
Seasonal Low Production: Steel sector is known as Power Consumer Industry as it’s dependent on power supply. In summer season, power cut, labor shortage and high temperature in plants are the major reasons behind the low production of Iron & Steel products. Therefore, around 30-40% of production scaled down in summer season.
Volatile Sales: No major changes have seen from past 5-7 days as sales of semi finish & finished steel are volatile that fluctuate prices by around INR 300-600/MT. Manufacturers hope that this situation may continue in coming time.
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