India: Semi Finish Price collapse where as Manufacturers says Further Downside is Limited

High finish inventory, low conversion margin and limited raw material availability continue to dominate the steel industry's fortune. 

TMT manufacturer in Mandi said that, “Present prices will see support as raw material prices are bottom out and our present margins are squeezed with high inventory”. He also added, “MS Ingot and Re-bar production has been cut across mandis to clear the inventory, which has impacted the free fall prices of sponge and scrap”.  

The week's major highlights are: – 

• MS Ingot/Billet Price continue to see the low bottom as price fall sharply by 2-3% W-o-W
• Sponge Prices, which were firm last week, witnessed a fall of 2.5-3% (approx INR 600-800/MT) 
• Scrap Price in Bhavnagar down by almost 3% W-o-W
• Re-bar price in Mumbai down by 1.5% W-o-W

Raipur, Chhattisgarh: MS Ingot production has seen a major cut, as sources confirmed that as many as 15-25 units surrendered their load requirement to CSEB. However traders says, it will not impact the present power tariff and demand-supply equation because of the fresh applications being submitted for Billet units. 

Sponge: Central India (Raipur) Production has increased due to increased pellet availability and good weather. However, the demand took a u-turn over low conversion and poor finish sales resulting in price decline of INR 900/MT, whereas, in other places prices went down by INR 400-600/MT. Similarly prices in Bellary region traded lower, as traders offered a discount of INR 300-400/MT over manufacturer's offers.

Scrap: Scrap availability is still under threat as JNPT port in Maharashtra has closed the operation owing to labor strike which is expected to open after Diwali. JNPT is the major port supplying around 5,000-8,000 tonnes of scrap to North India.