Standalone ingot/billet manufacturers in India are facing tough time on weakening steel demand & falling prices. High input cost amid low conversions spread led to shut down of few mills this week, specifically in central & eastern regions, SteelMint learned from market sources.
The latest price assessment for induction furnaces billet in Indian market is at INR 26,200-30,000/MT (USD 380-435) & FeM 80 P-DRI price assessment was at INR 16,200-16,800/MT (USD 234-244); prices are ex-plant & excluding GST.
Currently, the conversion spread (margins) in Raipur & Durgapur are near to INR 10,000/MT from P-DRI to billet which is at below par value.
According to the individual billet mills, on an average the conversion spread (margins) should be not less than of INR 11,000-11,500/MT which has continued to remain below this range since beginning of July.
Few manufacturers based in Raigarh, central India reported,
“As of now we have shut down our mills over high production cost comparatively lower selling price of material. Also fresh bookings will be on hold until there is any recovery in prices”.
Following the low ingot/billet production, inquiries for sponge iron reported to be limited. Hence the prices of sponge iron being slightly lower down which was on rising mode earlier and drop recent by INR 200-400/MT in Central & Eastern regions.
It seems that if the conversion spread remains on downtrend the IF/EAF owners may be reluctant to further lower production to balance supply-demand and margins as well.
Leave a Reply