Manufacturers based in Mumbai, Jalna & Ahmedabad reported increase in conversion spread from Scrap to Billet and Billet to Rebar.
In Mumbai, conversion spread from HMS scrap to MS billet presently are at INR 8,000/MT which was at INR 5,500-7,000/MT in – Q3 (Jul-Sep’16). Manufacturers reported, due to increase in conversion, production in Jalna, Mumbai and Ahmedabad has increased from earlier 12-16 hrs to 24 hrs.
A Jalna based standalone billet manufacturer quoted “In general we need conversion from Scrap at INR 7,000/MT, which is now increased at INR 7,500-8,000/MT”.
Similarly, Rebar production also reported an increase as conversion spread from Billet to Rebar. Hot rolling Mills operators said the conversion to Billet has increased in last couple of months.
A hot rolling mill operator in Wada stated ‘’margins are favorable now as conversion spread increased to INR 3,500-3,700/MT which was used to in and around INR 2,500-3,000/MT.
The sources added, there are approx 12-15 units including billet & hot rolling mills in the Industrial of Wada, Jalna, Pune, Nashik & Napur (Maharashtra region) that has raised operations from earlier 40-50% to 80-90%, since 1st Jan’17.
With raise in production of billet & rebar, supply in the local market has increased rapidly by approx 1,500-2,000 MT on daily basis. It can also refer due to increase supply the price has registered downfall of INR 1,000-1,200/MT in last couple of days.
Leave a Reply