SteelMint’s induction furnace mild steel billet index that monitors price movements in the key central Indian market of Raipur in Chhattisgarh saw a 13% increase in trade volumes in September to 84,906 tonnes (t) compared to 73,620 t seen in the previous month.
Trade volumes rose m-o-m as finished steel demand picked up especially of rebars with the monsoons coming to an end. The uptick in steel prices before the festive holidays also boosted billets demand. In addition, the balanced supply-demand dynamics supported billets trade.
Prices edge lower
SteelMint’s monthly average price of billets (100*100mm, IS: 2830) stood at around INR 47,670/t exw-Raipur in September, down by 2.4% compared to INR 48,860/t exw in August.
Prices saw slight fluctuations throughout the month amid changing sentiments in the finished steel market. Also, as September was a festive month, demand of finished steel and semis remained subdued, weighing on the billet index.
Supply was also limited in the market as the standalone furnaces and hot charging plants opted for a measured production on schedule on account of low margins. However, as billets prices rebounded later in the month, the conversion spread (margins) improved. As per SteelMint data, the conversion spread from sponge PDRI to billets in Raipur rose by 8% m-o-m in September.
Outlook
Billets prices in Raipur are likely to remain volatile in the coming month as finished steel demand during the festivals is expected to either remain subdued or slightly low.
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