Indian market players are anticipating that semis prices are likely to find support on account of expected boost in rebar and flat steel demand in coming days.
High volatile prices during previous weeks has made Indian stockiest and traders cautious. MS billet prices this week opened with minor corrections of INR 200-300/MT. However, prices in index markets like Durgapur and Mumbai remained firm at INR 22,000/MT and INR 24,300/MT respectively, showing a sign of stability.
Major trade dynamics
1. A Durgapur based manufacturer continued to sold billet to Mandi at INR 22,000/MT with a freight of INR 2,700/MT.
2. Raipur based manufacturers are under pressure amid narrowed rebar price conversion/spread. Today, prices have opened at INR 22,400/MT.
3. Demand of billet and rebar in Mumbai remained firm.
4. Prices in south India, especially Chennai and Hyderabad reported to be bullish as imported scrap suppliers have increased their offers by USD 5-10/MT.
Declaration of union budget FY17 in this month has created positive sentiments in the market. To boost infrastructure sector, the government has sanctioned a large amount and also planned to complete previous pending projects on fixed deadlines. This may boost finished demand in the upcoming weeks.
Other major factors to support semis prices
1. Increase in offers throughout the value chain of steel i.e from raw material to finished steel products in global market.
2. Minor fluctuations in iron ore prices by Odsiha miners.
3. Rising imported scrap offers
4. Increase in offers by primary players for both long and flat steel for Mar’16 bookings.
5.Good finished steel demand in secondary market.
Global market scenario
Global market sentiments remain bullish as Chinese iron ore prices rose by USD 11/MT within last 2 days. Meanwhile, Chinese domestic billet prices rose by USD 40-50/MT and export offers by USD 30/MT to USD 295-302/MT, FoB China. Moreover, CIS export offers have also increased by USD 10-15/MT to USD 265-270/MT, FoB Ukraine during the same period.
Viewing such positive sentiments prevailing in global market, it seems that this price rise will also keep Indian domestic prices on positive side.
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