As per data maintained with SteelMint, the conversion spread (margins) from sponge iron to MS Billet remained supported despite falling prices on less demand.
According to the Industry participants, the benchmark conversion required is about INR 12,500/MT from Sponge P-DRI to Billet which is currently in the range of INR 12,500-13,000/MT in Raipur & INR 13,500-14,000/MT Durgapur.
In addition, it was noticed that conversion has remained at INR 12,500-13,000/MT during mid of Apr’19 in both Raipur & Durgapur market. However since last few weeks, it increased sharply in Durgapur by around INR 1,000/MT as Sponge prices fell significantly by INR 1,000-1,500/MT M-o-M in comparison with slight fall in Billet prices. Following the constant drop, recent Sponge offers in Eastern region – Durgapur & Rourkela recorded 16 months low since Dec‘17.
The current price of Sponge P-DRI is hovering at INR 17,600-17,800/MT (FeM 78) in Durgapur & INR 18,300-18,500/MT (FeM 80) ex-Raipur. Meanwhile Billet trades reported at INR 31,400-31,600/MT in Durgapur & INR 30,900-31,000/MT ex-Raipur for 100*100 mm & commercial grade.
Sources stated that, sponge iron offers are less likely to fall further as raw material prices are strengthening, also demand is expected to improve after end of elections in the country.
Similarly, the 100-300 TPD Sponge makers in Odisha stated healthy bookings yesterday and it seems the prevailing prices are already trading at quite bottom so further correction is less expected.
Leave a Reply