On monthly average basis in Nov’16 billet prices had fluctuated around INR 1,000/MT (US$ 15). Slight price fluctuation have seen in Central & East India by INR 100-300/MT, where as major price changes have been recorded in South & West India by INR 1,000/MT.
Sluggish demand and falling production has affected billet prices in Nov’16. During the month, most of the manufacturers have reduced production by around 50% and few have halted operations for a time being to maintain demand supply chain. Thus, it has directly affected sponge sales and prices have slump down by INR 500/MT (US$ 7) in Nov’16.
Moreover, on analyzing margins (conversion spread; CDRI to Billet) the manufacturers margins were on same line, in Durgapur at INR 7,900/MT; similar against Oct’16. However, in Raipur it increased by 10% to INR 7,700-7,800/MT; in Oct’16 it was recorded at around INR 7,100/MT.
Billet monthly average prices since Apr’16
| Month | Durgapur | M-o-M | Raipur | M-o-M | Rourkela | M-o-M | Mumbai | M-o-M |
| Apr’16 | 22,650 | + 350 | 22,550 | – 100 | 21,750 | + 250 | 25,700 | 0 |
| May’16 | 21,750 | – 900 | 21,550 | – 1,000 | 20,850 | – 900 | 24,150 | – 1,200 |
| Jun’16 | 20,600 | – 1,150 | 21,000 | – 550 | 20,100 | – 750 | 22,200 | – 600 |
| Jul’16 | 19,750 | – 850 | 19,900 | – 1,100 | 19,100 | – 1,000 | 22,050 | – 1,200 |
| Aug’16 | 19,650 | – 100 | 19,700 | – 200 | 18,950 | – 150 | 21,450 | 0 |
| Sep’16 | 21,150 | + 1,500 | 21,400 | + 1,700 | 20,750 | + 1,800 | 23,350 | + 1,650 |
| Oct’16 | 21,850 | + 700 | 21,700 | + 300 | 21,150 | + 400 | 23,100 | + 50 |
| Nov’16 | 21,600 | – 250 | 21,850 | + 150 | 21,050 | – 100 | 23,850 | + 750 |
Basic prices in INR/MT, Changes are monthly average basis
Source: SteelMint Research
Leave a Reply