Indian induction grade billet prices hit an all time high according to data maintained by SteelMint (from the year 2010).
Current prices are assessed at INR 37,500-37,600/MT (Ex-Raipur), which is considered to be one of the largest billet producing region in India.
Prices in other parts of the country stands at INR 37,500-37,600/MT Ex-Mumbai, INR 36,300-36,500/MT Ex-Chennai, INR 38,000-38,200/MT Ex-Kolkata, INR 40,500-40,700/MT Ex-Mandi Gobindgarh
Reasons for rising prices
1. Robust demand from infrastructure
Demand for steel remains very strong from infrastructure, which is a result of government’s spending on affordable housing, flyovers, roads and metros. Market participants feel demand to remain strong till next general election, which is in 2019.
2. Implementation of E-Way bill
With the government had launched the electronic-way or e-way bill system from 1 April for moving goods worth over INR 50,000 ,unaccountable sales have reduced.
3. Depreciating Rupee
Indian exporters continue to enjoy depreciating Rupee, which is due to increase in global crude oil prices. Exports to neighbouring country like Nepal has increase multi folds in last few months.
4. Increased demand from pipe industry
Steelmint leaned from marker sources that rising demand for billet from pipe manufacturers is also supporting prices. Pipe is being manufactured from HRC or Patra (billet). Since HRC prices are high, pipe manufacturers have switched to billet.
What to expect in future?
Steel demand generally falls during monsoon season (June-August) owing to lower construction activities. We understand that manufacturers have raised their output to an optimum level amid high margins. Prices may come under pressure by end of the month.
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