On Tuesday, Indian domestic Billet prices hit a 4 year low due to improved supply and sluggish global demand. Current prices for 100*100 mm Billet are at INR 30,000/MT (Ex- Mandi Gobindgarh), INR 26,200/MT (Ex- Raipur), INR 26,500/MT (Ex- Durgapur) and INR 28,500/MT (Ex- Mumbai). These prices were last observed during March 2011.
Participants mention that Indian billet prices have crashed primarily due to sluggish demand in global market. This has forced Primary Steelmakers to sell Billet in local market, resulting increase in supply.
“India cannot be immune to global slowdown. Primary Steel manufacturers prefer selling Billet in local market rather than selling finished product in global market due to lower realizations. Offers from SAIL, RINL, JSW, NINL have increased recently, which are very competitive as compared to Secondary Steel manufacturers.” said a Billet manufacturer and re-roller based in eastern region of India.
Cheaper Imports
Participants also believe that lower offers from global suppliers is another reason for fall in Indian Billet prices. For instance, offers from China are at USD 370-375/MT CIF India and South Africa at USD 385-390/MT CIF India, which is very competitive as compared to domestic Billet prices. Recently some imports of Billet from South Africa and Slabs from Indonesia & Brazil were recorded in western region of India.
Market expects some resistance
Market expects some resistance in Indian Billet prices, looking at the rise in global Iron ore and Scrap prices. Iron ore prices in Chinese market improved 25% since April’15 and Scrap prices also went up by USD 20/MT in last couple of months.
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