Conversion spread from billet to rebar rallied by 6-9% M-o-M in Apr’19 in major locations despite limited demand in Indian domestic market.
The margins (conversion spread) of re-rollers was healthier in line with slight price fall in Billet, comparatively strong rebar offers during the month of Apr’19.
One of the major factors for improvement in conversion spread from billet to rebar is better marginal value over wire rod i.e. by around 6-9% or INR 300-400/MT.
In context to price movement, in Apr’19 rebar price range fell by around 1-2% or INR 500-700/MT in major regions by medium and small scale mills. In line the re-rollers were maintaining trade discounts upon booking quantity and the general discount was being offered by around INR 200-400/MT in major supply regions.
Further, the required conversion from billet to rebar for standalone mills is cited at around INR 4,000/MT and for Hot-charging it should be around INR 3,500-3,700/MT. Meanwhile for Wire rod mills it need at around INR 5,500/MT.
As per monthly assessment, in Apr’19 its being observed that average Rebar price stood at INR 36,000/MT and conversion at INR 4,400/MT, Wire Rod at INR 37,300/MT and conversion at INR 5,700/MT & Billet prices stood at INR 31,600/MT, Ex- Raipur.
On the other hand in Durgapur, average Rebar prices registered at INR 37,100/MT with conversion of INR 5,200/MT, Wire Rod at INR 37,200/MT with conversion of INR 5,300/MT & Billet prices recorded at INR 31,900/MT.
It seems that, as the conversion (margins) are fruitful with the mills, production rate continued to strong in domestic market. Recently released data by Joint Plant Committee (JPC) being showed surge in Indian Rebar production by about 6-17% through large scale mills & 39.4% by medium/small scale mills M-o-M in Mar’19.
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