Currently, Indian billet and rebars have registered volatility in prices as there was fluctuation in the demand.
Amid volatile prices the conversion spread from Billet to 12mm rebar in major markets reported in positive note. The spread are as follow – Raipur at INR 4,700/MT, Durgapur at INR 5,000 /MT, Mumbai at INR 3,700/MT & Hyderabad at INR 3,800/MT.
One of the manufacturer based in Western Region, Mumbai stated that the prices for Billet and Basic Rebar prices both are almost same so that conversion benefit is only of the gauge parity (i.e INR 3,100/MT for 12mm) which is quite low as handling charge of re rolling is high.
He further added that previously the mills were running in un-bearable loss and now have started recovering from the losses due to the continuous increase in price. These fluctuations in prices will persist in the market for coming weeks.
Manufacturers based in Central India, Raipur are maintaining conversion spread of INR 4,500-5,000/MT so that they can extract the maximum margins.
Similarly, in East India, Durgapur where the manufacturers are getting conversion of around INR 5,000/MT. After the end of assembly elections in U.P the manufacturers in Durgapur are receiving healthy bookings from across north-east regions.
According to the Industry participants the average handling cost for the standalone rolling mill is about INR 4,000/MT, while for hot rolling mill it required maximum INR 3,000/MT.
As the conversion is on a positive note this the reason the large number of manufacturers are running their mill full fledged in order to extract the maximum profit and meet the demand and supply chain as the manufacturers have very limited stock with them.
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