Weak sales of finished steel since last few months have led to continuous fall in MS Ingot/Billet prices in the domestic market at pan India. In spite of falling MS Ingot/Billet prices by upto INR 1,700/MT (5.5%) in last 1-month, Sponge prices have corrected marginally by INR 600-1,100/MT (4%) in central & eastern India. Whereas, finished steel prices have fallen by upto INR 1,600/MT (5%) in the same period.
Market participants are unable to say about the future prospect because of weak global market and dull sales of finished steel in the domestic market. Market participants believe industry will shift production in the range of 30-40%. Shortage of Iron ore & coal in the domestic market along with port congestion has depressed the industry sentiments.
Finished steel suppliers, who supply material mostly for projects stated, “Imported Rebar from China at INR 32,000-32,600/MT (ex-Mumbai & ex-Chennai) and less construction activities have subdued the market. Builders delayed the buying as they do not want to take any risk in down market. This in turn has lowered the bulk sales.”
MS Ingot in Rourkela is traded at INR 27,800/MT and Billet at INR 28,400/MT, which is the lowest offer in India (down by INR 400/MT in last 4 days). MS Ingot in Raipur & Durgapur is offered at INR 28,000/MT and INR 29,200-29,300/MT respectively. Furnace operators from central (Raipur & Raigarh) and eastern (Durgapur & Rourkela) India confirmed that buying from the local market remains dull and supply of MS Billet to North India has totally stopped owing to low production, high volatile market and non-viability of material.
Falling offers of imported Scrap have bounded the Indian Sponge makers to cut down their offers. As a result, Sponge iron prices are falling gradually as compared to major downfall in MS Ingot/Billet prices. In same line, Pig iron offers have also corrected by INR 200-1,000/MT M-o-M.
Semi Finish Prices (in INR/MT) with Conversion Spread & Power Charges
|
Major Market |
Sponge Iron (FeM 78-80) |
MS Ingot (3.5 X 4.5) |
Conversion (Sponge Iron to MS Ingot) |
Power Charges/unit (Approx) |
|
Raipur |
21,000 |
28,000 |
7,000 |
4.20-4.60 |
|
Raigarh |
21,000 |
28,200 |
7,200 |
4.20-4.60 |
|
Rourkela |
19,500 |
27,800 |
8,300 |
5.70 |
|
*Durgapur |
21,300 |
29,250 |
7,950 |
5.00-5.25 |
|
Hyderabad |
#18,500 |
29,800 |
11,300 |
6.25 |
*Delivered prices to Durgapur; rest ex-works
#Prices for Pellet sponge (FeM 77)
All prices for next day/advance payment
Source: SteelMint Research
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