Steel major SAIL’s Bhilai Steel Plant (SAIL-BSP) in Chhattisgarh has sold over 600,000 t of secondary steel – defective secondary steel or “re-rollable steel” – in FY21, monthly sales data preserved by SteelMint shows. Notably, defective steel sales have shot up sharply compared to approximately 400,000 t in FY20.
The material auctioned is mixed in nature comprising CC blooms, billets, plates, TMT bars, rails and also steel scrap. Secondary steel sales usually make up about 3% of SAIL’s consolidated annual revenues, but the figure is likely to be higher in FY21.
Sales had hit a peak of over 102,000 t in Dec’20, as downstream demand gathered pace along with elevated prime steel prices in the market before reversing down to the 45,000-50,000 t range in Feb-Mar’21.
Prices on the rise
Interestingly, SAIL’s overall realisations from sale of defective semis have inched up amid strong sentiments in the domestic market. SteelMint assesses CC defective blooms prices at INR 35,850/t in Mar’21 compared to bids in the range of INR 31,000-32,000/t at BSP auctions in Feb’21. In fact, prices have inched up by over 2,000/t on week at auctions in Mar’21, as SteelMint data reveals.
This is in harmony with elevated domestic semi-finished steel prices. SteelMint assesses billet (100×100 mm, IS: 2831) at INR 41,250/t (exw Raipur) on 31 Mar’21. In addition, prices of feed materials such as sponge iron have risen over the months.
Prices at SAIL’s secondary steel auctions are on the rise primarily because prime steel prices have increased. The price disparity between prime steel and “defective” secondary material is an incentive for users.
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