Dull finish sales have pulled down conversion spread by INR 500/MT compared to last month for rebar manufacturers in Raipur and Durgapur.
Secondary rebar manufacturers especially in Raipur and Durgapur are running plant with low conversion spread (from billet to rebar) in Feb’16. The major reason behind this is high MS ingot/billet prices, which were not in proportion to rebar prices.
Rebar manufacturers increased offers by INR 1,500-2,500/MT, after MIP imposition on various steel products. However, low demand and less buying at high offers have pulled down prices back by INR 1,000-1,500/MT.
In Raipur, conversion spread from billet to 12mm rebar in Feb’16 is around INR 3,400/MT, which was INR 3,900/MT in Jan’16 on a monthly average price basis.
Similarly in Durgapur, conversion spread from billet to 12 mm rebar in Feb’16 is around INR 3,000/MT, which was INR 3,500/MT in Jan’16 on a monthly average price basis.
A rebar manufacturer based in Raipur shared, “Demand of wire rod and structural is better as compared to rebar. Rebar prices were under continuous pressure due to high inventory and low stocking by retailers.”
He also added that required conversion spread from billet to 12 mm rebar should be in the range of INR 4,000-5,000/MT, depending on the brand/ automatic/ manual plant. But presently, it is hovering within INR 3,000-4,000/MT.
Indian billet and rebar prices as on 27 Feb’16
|
Region |
City | Billet | W-o-W | M-o-M | 12 mm Rebar | W-o-W |
M-o-M |
| Central | Raipur | 22,800 | +400 | +3,450 | 25,650 | -150 | +3,000 |
| Eastern | Durgapur | 22,100 | +100 | +2,750 | 24,800 | -100 | +2,300 |
| Western | Mumbai | 24,500 | -500 | +2,750 | 27,400 | -600 | +2,200 |
| Ahmedabad | 24,900 | +200 | +3,600 | 27,500 | +100 | +2,500 | |
| Northern | Gobindgarh | 26,200 | +300 | +3,300 | 30,300 | 0 | +2,500 |
| Ghaziabad* | 24,400 | 0 | +2,200 | 27,400 | -400 | +2,100 | |
| Southern | Hyderabad | 24,000 | 0 | +2,800 | 26,700 | 0 | +2,800 |
| Bangalore* | 21,600 | +400 | +1,700 | 28,900 | +900 | +3,700 |
Basic prices in INR/MT; excise duty and CST/VAT extra
* Ingot price
Source: SteelMint Research
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