MS Billet prices this week have opened in red because of increased production and low demand. Market participants expect that if negative sentiments continue in the domestic market, prices may correct further.
Increased Sponge & MS Billet Production pressurizes Manufacturers
Declining Iron ore & Pellet prices along with better availability of raw material have increased the production of Sponge iron & MS Billet. This in turn is pressurizing the semi finish manufacturers for price correction.
As of now, MS Billet prices are at the lowest level in Rourkela (-100); trading at INR 26,100/MT. However, major price correction of INR 300-400/MT W-o-W has been seen in Central India with Billet being offered at INR 26,500/MT in Raipur. On the flip side, prices in Western India remained firm and MS Billet is being offered at INR 28,700/MT with a slight correction of INR 100/MT W-o-W.
Few years back, Sponge prices didn’t fully co-relate to MS Billet prices, but now prices are relating with each other owing to better availability of material, which has also vanished Sponge cartelization. Currently, 81-82 FeM Sponge is being offered with a correction of INR 400/MT W-o-W at INR 18,100/MT ex-Raipur. While in Durgapur, the material is being offered at INR 18,000/MT; down by INR 300-400/MT.
Ship Breaking Prices in Gujarat down by upto INR 500/MT in 2 days
Ship breaking prices in Alang, world’s one of the largest ship breaking yards, have declined between INR 250/MT and INR 500/MT for various grades. The highest fall of INR 500/MT has been seen for HMS (80:20) grade since yesterday. 6-8 mm ship breaking Scrap is being offered at INR 24,700/MT.
An agent said, “Prices have declined in order to balance demand & supply. There is none other such reason for correction. We may expect further decline in prices by INR 200-400/MT as demand is low and supply is intact.”
MS Billet & Sponge Prices with Conversion Spread
| Particular | Billet Price | W-o-W | C-DRI Price | W-o-W | Conversion Spread | W-o-W |
| Ex-Mandi Gobindgarh | 30,500 | – 400 | 21,000 | 0 | 9,500 | – 400 |
| Ex-Durgapur | 27,200 | – 400 | 18,300 | + 100 | 8,900 | – 350 |
| Ex-Rourkela | 26,100 | – 300 | 16,600 | – 400 | 9,500 | + 200 |
| Ex-Raigarh | 26,300 | – 500 | 17,400 | – 300 | 8,900 | – 150 |
| Ex-Raipur | 26,500 | – 400 | 17,100 | – 500 | 9,400 | – 100 |
Prices in INR/MT
Source: SteelMint Research
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