India: Semi Finish production hit by raw material shortage

MS
Ingot/Billet manufacturers continue to run plants in low conversion owing to
rising raw material price along with its shortage and poor off-take. Scrap and
Sponge prices continue to remain high in Northern and Central India supporting
Ingot/Billet prices at present level. However market participants believe that
Semi Finish price might witness a sharp fall (up to 2%) if supply of raw
material  improves. Major week highlights
are:

MS Ingot: Price strengthens by INR 300-350/MT
W-o-W in Mandi Gobindgarh, Durgapur and Jaipur over limited production, and in
the other cities, prices remain range bound. Sources confirmed Mandi Gobindgarh
received approx qty 6,500 MT of MS Ingot (in Rail mode) from Rourkela (Orissa)
at FoR price of INR 31,300/MT that held the local sales on Thursday (last week)
as prices offered were cheaper than local produced MS Ingot by INR
700-1,000/MT.

Sponge Iron: Few merchant sellers of Sponge Iron;
held the prices in Central and Eastern India. SteelMint learned that only
25-30% sponge manufacturers are selling material and remaining producing only
for captive use. Bad weather in Raipur and Bellary also hit the production that
was expected to improve this week. Improved supply of Iron pellet in domestic
market will pressure sponge prices as Sponge pellet production is expected to
exceed the demand. Sponge Iron FeM 88 is quoted at INR 20,400-20,900/MT Ex
Works Durgapur and Raipur.

Scrap: Low domestic MS Scrap availability
and shortage of imported scrap in Ludhiana and Muzaffarnagar ICD increases the
scrap prices by INR 500-700/MT W-o-W. Bhavnagar ship breaking scrap prices
increased by INR 400-500/MT W-o-W.

Re-bar: Secondary manufacturers hold the
price at previous week irrespective of high Ingot prices due to poor sales in
retail and project sales. Sources confirmed inventory level in Maharashtra
(highest producing Re-bar state) reached to 15-20 days and plant has cut the
production to clear the stock. Prices corrected by INR 600/MT W-o-W in Mumbai,
whereas in other regions price remained at same level.