With a continuous hike in prices, Indian billet is trading over 2 years high in major locations. However, with the same proportion rise in sponge prices, the margins remained poor of standalone billet plants.
Currently, the conversion spread is hovering at INR 10,000/t from P-DRI to Billet in both Raipur & Durgapur which are the major markets for the spot trades of billet.
In line, billet offers have reached at INR 34,000/t exw Raipur & DAP Durgapur. This price was last seen during Feb’19 & Nov’18, respectively.
What may happen?
There are assumptions that billet makers margins are likely to remain under pressure as finished steel demand is not upto the mark in major locations while rising sponge prices is creating pressure over billet producers to keep prices strong to maintain their minimum conversion spread (margins).
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