India: MS Ingot/Billet Manufacturers show Relief as Conversion Increases

Conversion from Sponge Iron to MS Ingot/Billet increases from INR 7,500-8,500/MT owing to the low production by stand alone units Manufacturers. Price are supportive for Ingot/Billet market at present.

SteelMint assessed that after shut down of some plants of Ingot in major market like Raipur, Durgapur, Mandi and Rourkela the conversion from Sponge to Ingot has increased in these cities within a month’s time. There was an increase of around INR 300-600/MT in a month’s period.

‘Ingot production is down as manufacturers have shut down their units (about 20-25 standalone units) and others are operating at around 60% capacity. As a result, Sponge demand is under pressure and its effect can be seen on narrow prices movements. This has increased the gap between Sponge and Ingot prices.’

Industry sources believe this situation will remain till March’14. However, supply of Iron ore from Orissa remains a concern, that might support Sponge price at INR 19,000 to 20,000 levels.

‘’In Durgapur, Ingot sales are at around INR 28,000-28,500/MT similar to Raipur. Manufacturers believe that prices may not decrease from INR 28,000/MT in Durgapur owing to the increasing raw material prices and poor production of Ingot. This exerts an additional pressure on manufacturers, as they won’t be able to cut down the prices any further,” quoted an Ingot manufacturer.

                                                                Conversion Table for Sponge to Ingot

 Note: Mentioned prices are average of  every month’s 2013.

December prices are till 14^th-Dec-2013