Today, billet manufacturers in domestic market have raised their offers by INR 100-500/MT in central, east and south India. Sources reported that strong raw material prices is supporting them for further price rise.
Currently, offers for billet (100*100 mm) are evaluated at INR 21,600/MT ex-Raipur, INR 21,400/MT ex-Durgapur, INR 23,300/MT ex-Mumbai, INR 23,800/MT ex-Chennai and INR 23,000-23,500/MT ex-Hyderabad.
However, the manufacturers are worried about low margins (conversion spread). According to manufacturers, the minimum conversion spread requires from P-DRI to billet is INR 9,000-9,500/MT, which has currently reached at around INR 8,000-8,500/MT in Raipur, Durgapur and Rourkela.
Ingot/billet manufacturers in Raipur have scheduled meeting today to have a discussion on how to reduce raw material costing. According to a senior person of furnace association, they are planing to sign a MoU with NINL and purchase the material directly from the plant. This will reduce the material cost by INR 500/MT as compared to material available in local market.
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