Indian Billet Offers Stable as Market Waits for GST

Indian domestic billet offers remain stable as market waits for GST (Goods and Service Tax).

Indian government is to implement biggest tax reform i.e one nation, one tax from July 1, 2017 in order to avoid tax on tax. GST is an indirect tax throughout India to replace taxes levied by the central and state government. Under GST, Steel will be taxed at 18%, which is currently 12.5% excise duty and 5% VAT, if it is intra state or 2% CST, if it is inter state.

Current offers for square billet of size 100*100 mm induction grade (IS 2831) are assessed at INR 25,400-25,500/MT (ex-Raipur), INR 24,900-25,000/MT (Ex-Durgapur), INR 24,700-24,800/MT (Ex- Rourkela) and INR 26,000/MT (Ex-Hyderabad).

The trade participants mentioned, trade volumes remained thin as market waits for new tax structures and understand its impact. However people are hopeful that GST will benefit the trade and states with lower cost of production, will benefit.

Trade Wise

1.  Vizag Steel concludes 95*95 mm billet export tender to Nepal at above USD 400/MT (Ex-Mill)

2.  Vizag Steel cancels 95*95 mm billet tender for other countries owing to lower bids

3.  SAIL drops 15,000 MT of 150*150 mm billet export tender on expectation of higher bids. Company received bids at around USD 390-395/MT FOB India

Domestic billet offers as on 27 Jun’17

Reference Prices in INR/MT
Source: SteelMint Research