Trade sources mentioned that Indian billet prices are likely to remain volatile in near-term. Increase in export, strong raw material prices and production curtailment by few secondary manufacturers indicate slight price fluctuations in Indian billet market.
Export Gains Momentum in Asia
Indian billet/bloom export during Jun’16 was 35,300 MT, which boosted up to 82,237 MT in Jul’16. However, there is hope that during Aug-Sept’16, export will nearly doubled as both primary & secondary manufacturers are receiving overwhelming response from the global buyers with premium price realization. Last deal in Aug’16 was heard at USD 322-327/MT, FoB India.
In last week, Gujarat based manufacturers have also received export enquiries from Veitman, Taiwan and Mauritius. A source from market mentioned that in the last week, a deal of about 2,000 MT had concluded at USD 315/MT (INR 21,100) ex-works; material dispatched through containers.
In the same line, Odisha based few large merchant sellers are also actively exporting billet to Nepal in the price range of INR 19,200-19,500/MT ex-plant. Agents reported that billet demand is strong in Nepal and since couple of months, about 15,000-20,000 MT material has been sold per month by manufacturers. He further mentioned that OCL Iron, Ganesh Metals and Bhaskar Steel are the major manufacturers, who are exporting billet to other nations.
Strong raw material prices
Sponge, Pig iron and Silico manganese are the key raw materials for billet manufacturers. Prices of these materials are rising continuously due to increasing coal prices, boost in export and seasonal less production & supply. It is anticipated that prices of these products will remain at current levels as sellers are limited at current offers.
Production curtailment
Central, east & western India based few merchant ingot/billet manufacturers are running units for limited hours to reduce their losses. It should be noted that here conversion spread of ingot/billet is low by INR 1,500-2,000/MT from couple of months. According to manufacturers, they are unable to fetch their production cost at current trade price. Thus, they are running their plants only to utilize the minimum quota of electricity.
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