SteelMint’s induction furnace (IF) mild steel billet index that monitors price movements in the key central Indian market of Raipur in Chhattisgarh saw a 26% decrease in trade volumes in October to 62,950 tonnes (t) compared to 84,906 t seen in September.
Trade volumes fell m-o-m due to lower bids and limited buying in the market. Weak finished steel sales dampened demand for billets. The market saw need-based procurement as buyers were expecting a price correction.
The fall in sponge iron prices also weighed on billets buying sentiments. Pellet-based sponge iron (PDRI) prices in Raipur edged lower by 2% m-o-m to INR 31,600/t exw in October.
Also, the market slowed down because of the festive holidays, affecting overall trade volumes.
Prices flat m-o-m
SteelMint’s monthly average price of billets (100*100mm, IS: 2830) stood at INR 47,570/t exw-Raipur in October, stable m-o-m compared to INR 47,670/t exw in September.
Though an upward momentum was seen in billets prices in early-October, the index kept on falling for the rest of the month as demand waned amid weak steel sentiments and the festive slowdown.
Because of weak demand and falling margins, standalone furnaces and hot charging plants lowered production rates, balancing the demand-supply dynamics.
Outlook
As there are sufficient stocks of finished steel in the market, it is likely that billets demand may remain low in the remaining days of November. This should keep prices under pressure. Also, weak global steel sentiments may affect domestic billets prices, SteelMint notes.
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