SteelMint’s induction furnace mild steel billet index that monitors price movements in the key central Indian market of Raipur in Chhattisgarh saw a 7.2% m-o-m decline in trade volumes in August to 73,620 tonnes (t) from 79,350 t seen in the previous month.
Weak demand and sluggish finished steel sentiments weighed on billet trading activity. Volatile steel offers in the northern region led to cautious buying of semi-finished steel.
August also saw sluggish demand amid the Rakshabandhan, Independence Day and Krishna Janmashtmi festive holidays that impacted trading activities.
Notably, the export duties imposed on steel products impacted billet demand in the domestic market.
Prices down marginally
SteelMint’s monthly average price of billet (100*100mm, IS: 2830) stood at around INR 48,740 exw-Raipur in August, a marginal drop of 1.1% compared to INR 49,290/t in July.
Prices remained volatile throughout the month following bearish finished steel demand due to seasonal factors.
Outlook
Owing to a weak demand outlook and lower margins, domestic billet producers have curtailed production as finished steel sales are unlikely to rebound anytime soon. Hence, the bearish trend in the billet market is likely to continue in the coming month. Also, the downward price movement in the primary steel market will keep weighing on secondary steel prices, SteelMint understands.
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