As per sources, ingot/billet manufacturers in Raipur (Chhattisgarh) have decided to curtail production by about 50% in order to combat with high costing and to match demand-supply chain.
Chhattisgarh is one of the major steel hub of central India and produces about 8,000-10,000 MT ingot/billet per day. The state based ingot/billet makers sell 70% of produced material in domestic market.
“To produce ingot, we require a minimum conversion spread of INR 10,000/MT from P-DRI to ingot, which is presently narrowed down to INR 8,500-8,700/MT. Thus, our association has decided to curtain production as per the requirement”, mentioned a senior official of furnace association in Raipur.
It is also to be noted that out of total rolling mills, few mill are closed and the rest are operational with upto 50% production capacity. This has led to low off-take of ingot/bIllet in local market and continuous fall in prices.
Impact on domestic market
If manufacturers will reduce their production by 50%, ingot/billet prices will gain some momentum in near term. This price rise is likely to be for short duration as demand from finished steel market is still sluggish.
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