Indian Billet Market Gains Stability Post Sharp Correction

While domestic MS billet prices gain some stability, south market witnesses sharp price correction.

Domestic MS billet market has started to gain stability after sharp decline in prices in last two weeks. The major factor of stability in prices is production cut by manufacturers. Sponge iron and iron ore prices also remained stable this week, leading to unaltered billet offers.

Sharp price correction in east and south India

South based billet makers have declined prices sharply by INR 700-1,050/MT W-o-W in Hyderabad and Chennai owing to subdued demand. Similarly in Durgapur, prices went down by INR 500/MT to INR 21,700/MT due to production cut by local rolling mill operators.

Meanwhile, Durgapur market this week received few queries from Nepal and Bangladesh. Sources said that about 1,000 MT billet was sold at USD 345/MT (INR 22,000/MT, ex-Durgapur) to Bangladesh.

A billet manufacturer said, “We have sold billet at USD 345/MT and there are also few other inquiries. Delivery period from Durgapur to Bangladesh is around 3 days and freight is USD 25/MT (INR 1,400/MT). Currently, local demand is very poor and few rolling mills have shutdown their plants.”

Trade-wise

1. In the beginning of this week, Durgapur sold billet to Gobindgarh (north India) in bulk quantity at INR 21,500-600/MT ex-works; freight was INR 2,100/MT.
2. Odisha based big manufacturers offered billet at INR 21,400/MT (ex-works) to Gobindgarh based traders. However, buyers are not willing to purchase from Odisha owing to difficulties in transportation.
3. Most of the manufacturers based in Maharashtra have reduced billet production by 50-60%.
4. Raipur based billet makers are under pressure as offers by Durgapur and Rourkela producers are INR 600-800/MT cheaper. As a result, north Indian buyers are showing low buying interest in Raipur market.

MS billet prices as on 5 Aug’15

Prices in INR/MT; *Next day payment
Source: SteelMint Research