Post communicating with market sources, manufacturers and participants in context to price scenario, SteelMint has inferred that domestic billet prices are fluctuating by INR 500-800/MT across major markets. And, it is anticipated that prices will remain range-bound at current levels of INR 18,400-21,600/MT due to stable imported offers, firm sponge prices including others.
1. Stability in imported scrap offers: Out of the total crude steel production in India, approx 20-30% of steel is being produce by melting scrap either domestic or imported through induction furnaces. Imported scrap offers have been stable since a month and may remain stable amid winter season and festive mood in ASEAN countries. At present, US origin Shredded scrap is available at USD 205/MT, CNF Mumbai.
2. Firm sponge prices: Sponge prices in domestic market have been declining at a slow pace since few months as compared to price corrections in other steel products. Price reduction by Odisha miners may not provide any relief to sponge makers as they already reported thin conversion spread at present prices. This may lead to firm sponge prices in coming weeks.
3. Semi prices hit an all time low: Semi finish prices have already touched an all time low level. Looking at non healthy costing amid sharp decline in billet prices, the semis manufacturers are curbing production. Lowest levels of billet prices have touched in Mumbai, Raipur and Durgapur at INR 21,600/MT, INR 19,350/MT and INR 19,150/MT respectively.
Current semis prices with conversion spread
| Particular | Billet Price | C-DRI Price | Current Conversion Spread |
1-Week Earlier Conversion Spread |
| Ex-Durgapur | 19,150 | 11,450 | 7,700 | 7,950 |
| Ex-Rourkela | 18,450 | 10,550 | 7,900 | 7,700 |
| Ex-Raigarh | 19,200 | 11,600 | 7,600 | 7,300 |
| Ex-Raipur | 19,350 | 12,300 | 7,050 | 6,800 |
| Ex-Mumbai | 21,600 | 15,600* | 6,000 | 6,550 |
Prices in INR/MT
*Scrap price
Source: SteelMint Research
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