India: Semi Finish Production likely to increase post Festival – Reports

Secondary manufacturers have raised MS Ingot/Billet prices by INR 200-400/MT W-o-W. However, trade volume remains thin in the local market as well as nearby states owing to festive season.

MS Ingot/Billet prices have risen by INR 200-400/MT. Whereas, Sponge iron prices also inched up by INR 100-300/MT with dull trade volume.

Market participants expect that post Dushera and festival season, finished steel demand is likely to pick up from the current levels along with increase in production. Also, raw material crisis in the country will support the prices.

Finished steel trader in Mumbai says, “Long steel demand is likely to improve. We believe prices will also increase by INR 500-1,000/MT in coming weeks as buying sentiment seems to be robust.”

Punjab: Night Power Tariff down by INR 1.5 per unit; Production may increase

Reduction in power tariff by INR 1.50 per unit (i.e. from 01 Oct, 2014) in Punjab is likely to raise the production in night as well as in day shift. Cut in production cost will also provide some relief to MS Ingot/Billet and finished steel manufacturers after a long time.

Furnace manufacturer based in Mandi added, “Decline in power tariff by INR 1.50 per unit will reduce the production cost by INR 1,000-1,200/MT as to produce 1 MT of MS Ingot, we require 600-650 units of electricity. It will surely reduce the prices but production is expected to increase.”

Limited Viability of Semi Finish to North India

In Rourkela, Ingot/Billet offers are cheaper by INR 1,500/MT as compared to Raipur & Durgapur Ingot/Billet prices. MS Ingot is being traded at INR 28,900/MT and MS Billet is offered at INR 29,300/MT. Freight to Mandi is around INR 3,400/MT, which makes FOR price (Billet) to around INR 33,300/MT (including CST). Amid low electricity price in Mandi, it  is expected Ingot/Billet offers fall by INR 400-600/MT from present level, which will not support the buying to outside-state. Similarly, viability from Durgapur is also limited as transport remains closed owing to Durga Puja.

Manufacturers based in eastern India mentioned, “Market is likely to close for 6-7 days from 01 Oct, 2014 onwards owing to Durga Puja. Dispatches are also expected to halt during these days.”