India: Semi Finish Prices started to decline; Stagnant Sales Continue

Indian Billet and Sponge iron prices showed resistance, traders expecting prices may fall on low demand and improving mining situation in Odisha

Semi finish prices likely to correct by INR 500-1,000/MT in near term due to stagnant finish Long sales, renewal of few banned Iron ore mines by Odisha government and upcoming monsoon, which may hit by mid of Jun’14.

1. MS Ingot offers across India reduced by INR 500-1,000/MT W-o-W
2. Sponge offers slashed by INR 300-500/MT in a week’s time
3. Re-bar prices in Raipur, Muzaffarnagar & Mumbai declined by INR 300-700/MT

Mumbai, one of the biggest buyers of finish Long products from Raipur, witnesses stagnant sales in local market. Sources confirmed that MS Ingot/Billet sales are absent from past long time.

Similarly, manufacturers of Raipur & Durgapur also believe that sales of semi finish & finished steel are declining continuously, which reduces prices marginally by INR 100-300/MT per day.

MS Ingot offers in domestic market are in the range of INR 31,000-35,000/MT and Sponge traded at around INR 21,000-24,000/MT. Sources mentioned that buyers are cautious for this offers with an anticipation that prices may fall drastically.

SteelMint assessed that conversion (profit margin) from Sponge to Ingot is stable from past few days at around INR 9,000-9,500/MT in Raipur & Raigarh. Similarly in Rourkela & Durgapur, it is at around INR 10,000-10,500/MT.

However, power charges in cities like Raipur & Raigarh are at INR 4.50/unit, whereas in Durgapur, it is at INR 5.40/unit and in Rourkela at INR 5.70/unit.

Viability of MS Billet from Central to North India increases further

Raigarh is offering MS Billet for Mandi at INR 32,300/MT Ex-Raigarh. Freight charges by Road from Raigarh to Mandi are at INR 3,000/MT.

Durgapur is quoting Billet for Mandi at INR 33,000/MT Ex-Durgapur. Freight charges by Road from Durgapur to Mandi are at INR 2,600/MT.

Delivered prices of MS Billet to Mandi from Raigarh & Durgapur will be INR 36,000-36,200/MT (including freight & CST).

It is also noted that Mandi buyers are purchasing MS Billet from Rourkela by Rake. Manufacturers in Rourkela offer MS Billet at INR 32,000/MT on Ex-Plant basis. Freight charge by Rake from Rourkela to Mandi is at INR 1,800/MT; delivered prices are at around INR 34,500-35,000/MT (including freight, CST & loading-unloading charges).