Domestic billet manufacturers are still under pressure to reduce their offers in order to sustain in market. In a week, prices in central and west India have declined by INR 500/MT and a sharp price correction of INR 1,000/MT has been seen in east and north regions.
Alongside, central and east India based maufacturers are persistently seeking bulk buyers in other regions, but demand is still subdued, leading to price corrections.
Current MS billet offers across major markets are: Raipur at INR 23,050/MT (-450), Durgapur at INR 22,650/MT (-1,050), Mandi Gobindgarh at INR 26,000/MT (-800), Mumbai at INR 23,700/MT (-600), Jalna at INR 23,800/MT (-600), Hyderabad at INR 24,000/MT (0) and Chennai at INR 23,800/MT (-50).
No Viability in Market
In order to supply billet from central (Raipur) to west India (Mumbai and Jalna), there should be a price gap of INR 1,800-2,400/MT, which is currently in the range of INR 1,200-1,300/MT. Similary, price gap from Raipur to Gobindgarh should be around INR 3,700-4,000/MT, which has reduced to INR 3,000/MT. This has created non-viability in domestic market.
In future prospects, it seems that there is lesser probability for improvement in billet prices looking at declining prices of imported scrap (a key raw material in west and north based markets) and subdued finish steel demand.
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