SteelMint in conversation with buyers in north-east regions – Punjab, Delhi & U.P learned that, they have shifted their purchase to Raipur, Central India due to competitive offers.
Earlier these sources used to buy material from Eastern India-Durgapur, however low cost Raipur material by around INR 1,000/MT (USD 14) have attracted them to shift their purchase interest.
The current trade reference prices of 5.5mm Wire rod is hovering at INR 28,500-28,700/MT ex-Raipur & INR 29,500-30,300/MT ex-Durgapur.
As per them, freight cost from Raipur to Punjab, Delhi is about INR 2,700-3,000/MT and for U.P close to INR 2,000-2,500/MT, which is similar in comparison from Durgapur to these respected markets.
One of the official from a price trend setter plant in Durgapur stated that buyers refused to buy as they are getting wire rod from Raipur at near to INR 28,500/MT, although their selling interest is not less than of INR 29,500/MT ex-plant.
Similarly, the plants in Raipur reported better sales since couple of days due to cheaper offers.
Conversion spread narrowed down
The conversion spread (margins) from Billet to Wire rod has narrowed down sharply due to constant drop in prices since few days.
Presently, the conversion from Billet(100*100mm) to Wire rod(5.5mm) in Raipur & Durgapur is hovering at INR 3,000-3,500/MT (USD 42-49) which should be not less than of INR 4,000/MT, as per producers.
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