Indian billet manufacturers are reeling under pressure due to constant sluggish demand and higher raw materials prices of scrap, sponge, pig iron & silico manganese. This has plunged down the manufacturers’ margin (conversion spread) to lowest in current year.
On monthly average basis conversion spread from C-DRI to billet in sponge based markets (melting 80-90% sponge) have hit lowest to INR 7,400/MT ex-Raipur, INR 7,350/MT ex-Durgapur & INR 7,850/MT ex-Rourkela. Similarly, in scrap based markets (melting 80-90% scrap), conversion spread are at INR 6,050/MT ex-Mumbai, INR 6,600/MT ex-Chennai & INR 5,650/MT ex-Mandi Gobindgarh.
Demand from rebar manufacturers – who occupy a major share of buyers, is not supportive. This has led to continuous decline in billet prices. In line manufacturers in east, west & central India are already running plants under capacity levels (only to utilize minimum quota of electricity) to reduce running losses.
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