Week 8 concluded with mixed sentiments in Indian semi finish market. On one side, billet prices increased by INR 100-400/MT across major markets. On the other, sponge prices remained almost firm with minor corrections of INR 100-200/MT due to high inventory.
The major reason behind pick up in MS billet demand was good volume of sales booking in wire rod. However, selling pressure was heard in sponge sales due to high inventory and poor buying from west and north India. Market participants kept buying cautious amid announcement of union budget FY17 on excise duty and infrastructure guidelines.
However, Pig iron prices remained range-bound owing to volatility in ingot/billet market.
Week 8 highlights
1. Current 78-80 FeM sponge iron prices are prevailing in Durgapur at INR 13,000/MT (-150), Rourkela at INR 11,600/MT (-200), Raipur at INR 13,100/MT (-200) and Bellary at INR 11,700/MT (-250). Price change is weekly
2. Meanwhile, P-DRI prices hovered in the range of INR 11,200-12,300/MT in the market.
3. Billet price movements are INR 22,100/MT (+150) ex-Durgapur, INR 22,800/MT (+400) ex-Raipur, INR 21,500/MT (+50) ex-Rourkela, INR 24,500/MT (-500) ex-Mumbai and INR 24,000/MT (0) ex-Hyderabad.
4. Imported scrap offers were on positive side; HMS was available at USD 190-200/MT (depending on grades) and shredded at USD 205-210/MT, CFR India.
5. Freight rates remained stable in the Railway Budget FY17.
Week 9 prospects
1. Semis demand and prices are expected to remain firm amid major announcement in upcoming union budget FY17.
2. Looking at present demand and query, there is probability of rise in imported scrap prices, however, depreciating Rupee can be a constraint for price rise.
3. Odisha government notified collection of DMF. The state based miners will have to transfer the funds in respective DMF accounts. Sources say, prices are likely to increase by INR 100-150/MT.
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