Indian Billet prices will remain under pressure owing to weak demand from the global market. As observed, last export tender of 85,000 MT Billet/Bloom by Vizag Steel received bids lesser than USD 20-30/MT from previous tender. If situtaion prevails like this, large manufacturers will be forced to cut their prices and sell the material in domestic market, which in turn will pressurize the small & medium scale manufacturers.
Indian Billet prices have corrected marginally this week and manufacturers anticipate further correction in near-term. Prices in Mumbai have weaken by INR 500/MT W-o-W as local rolling mills shift purchases from Eastern India.
Billet manufacturers based in West Bengal are operating induction furnaces at upto 60% capacity level owing to liquidity crunch and sparse demand from nearby states as well as rolling mills. This has led to decrease in production.
Central India based manufacturers are continously supplying MS Billet to North India. A deal from Bhilai to Mandi was sealed at INR 28,200/MT on 1% CST. Buyers based in North India are willing to purchase the material from Central India because of easy availbility of vehicles.
Market experts believe that if supply increases from big manufacturers, we can expect production cut by the small & medium manufacturers. Moreover, improving raw material situation (few Iron ore mines have increased their production in Odisha) and strong Rupee will lead to more pressure on prices.
Domestic Scrap availability has also improved last week as many units have reduced the production. Prices in Scrap based markets like Mumbai and Ahmedabad have fallen by INR 200-500/MT W-o-W. Whereas, prices in Sponge based markets (East & Central India) have declined marginally by INR 100-200/MT W-o-W.
Key Highlights
- Indian Billet prices are assessed at INR 27,300-31,600/MT ex-works
- Manufacturers based in Central and East India (Raipur & Rourkela) are continuously supplying Billet to West and North India, which supports the current prices
- Indian Sponge iron prices remain stable due to low supply of Iron ore
- Imported Scrap (HMS 1&2) offers from Middle East remain at the same level of USD 310-315/MT, CIF Nhava Sheva
- Billet prices in the global market remained firm owing to rising Scrap prices. Billet offers from CIS (Russia/Ukraine) are assessed at USD 402/MT, FoB Black Sea
- Pig iron export tender received single bid of USD 306/MT, FoB Vizag for 30,000 MT, held on 8 Jan, 2015
Billet Prices as on 14 Jan, 2014
| Particulars | Prices | W-o-W | Remarks |
| Raipur | INR 28,200/MT | + 100 | Offers from Raipur to Mumbai are INR 30,100-30,200/MT, FoR |
| Durgapur | INR 27,800/MT | – 200 | Billet delivered to Mandi at around INR 30,700/MT (including freight & CST) |
| Chennai | INR 30,600/MT | 0 | Buying remains weak |
| Mumbai | INR 30,400/MT | – 500 | Prices correct on increased movement from Eastern India |
| FoB Black Sea | USD 398/MT | 0 | Russian currency may support Russian manufacturers to cut offers |
| FoB India | USD 415-420/MT | 0 | RINL export tender received bids at USD 415/MT, FoB. Company canceled Billet tender |
| USD 1 | INR 62.16 | – 1.14 | – |
Source: SteelMint Research
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