As per a recent billet survey conducted by SteelMint across India, 67% say prices will decline further and the rest 33% believe prices have bottomed out.
SteelMint recently conducted a survey in eight major states namely Punjab (Mandi Gobindgarh), Odisha, Chhattisgarh, Gujarat, Hyderabad, Maharashtra, Chennai and West Bengal. The motive behind this survey is to analyse the extent of billet price correction in domestic market.
During the survey, 67% of Indian manufacturers say that prices have not yet hit rock bottom and there is still a probability of price corrections in coming days. However, the remaining 33% believe that prices have bottomed out.
Manufacturers based in these 8 states highlighted that dwindling demand from finished steel market is the major factor of decline in billet prices, followed by weak global sentiments and high billet production.
Where do You See Billet Prices in Next 3 Months?
When asked about the scope of billet prices in next 3 months, 58% of manufacturers anticipate that prices will either stabilize at current levels or gain by over INR 500/MT in the duration. While, 42% expect for price correction of more than INR 500/MT.
Current Domestic Billet Price Scenario
In a month’s time, MS billet prices fell upto 10.8% across major Indian markets. Price movements in major markets with monthly corrections are – Mandi Gobindgarh at INR 25,500/MT (- 3,100), Durgapur at INR 22,200/MT (- 2,700), Rourkela at INR 21,500/MT (- 2,550), Raipur at INR 22,500/MT (- 2,550), Mumbai at INR 23,600/MT (- 2,600), Chennai at INR 25,050/MT (- 1,350) and Hyderabad at INR 24,300/MT (- 700).
Current Global Billet Sentiments
MS billet offers in Tangshan, China have gained further by 5% in this week (23 July-30 July’15). Currently, Chinese manufacturers are offering at RMB 1,840/MT, which was RMB 1,750/MT last week (prices inclusive of 17% VAT). The reason behind price hike is strict pollution norms imposed by the Chinese government in its major steel producing state, Tangshan. However, Chinese billets are still cheaper by at least USD 20-30/MT from any other country’s price.
At present, imported billet offers are assessed at USD 290/MT FoB China, USD 370/MT FoB India, USD 315/MT FoB Black Sea, USD 330/MT CNF Turkey and USD 315/MT CNF Bangladesh.
Viewing the overall scenario, SteelMint has inferred that MS billet prices are likely to fall further as there seems no likelihood of improvement in demand in coming days. Weak demand from construction segment amid severe liquidity crunch and pending projects will still hamper the finished steel business.
Leave a Reply