Week 11 concluded on positive note as semi finish prices across major markets moved up by INR 300-1,500/MT W-o-W. Billet prices increased steeply by INR 500-1,500/MT and sponge by INR 300-900/MT in domestic market.
Billet buying from north India improved as Patra mill has boosted its production (substitute of HRC; prices rose by INR 4,500-5,000/MT post MIP). Wire rod and structure demand also reported to be decent, which in turn has supported billet prices. However, rebar mills continue to sale the material below fix conversion spread.
Sponge offers in few markets like Durgapur and Rourkela remained firm with minor price correction of INR 100/MT.
Pig iron prices also reported at high end for steel grade, but foundry grade prices remained firm.
Week 11 key dynamics
1. Current 78-80 FeM sponge iron prices prevailing in Durgapur at INR 12,700/MT (-100), Rourkela at INR 11,450/MT (-100), Raipur at INR 13,450/MT (+300) and Bellary at INR 13,200/MT (+900).
2. P-DRI prices hovered in the range of INR 11,500-13,800/MT in the market.
3. Billet price movements are INR 22,600/MT (+600) ex-Durgapur, INR 23,300/MT (+550) ex-Raipur, INR 21,900/MT (+400) ex-Rourkela, INR 25,200/MT (+900) ex-Mumbai and INR 26,000/MT (+1,500) ex-Hyderabad.
4. Pellet prices in eastern, central and southern India remained stable. However in Kandla (western India), offers moved up by INR 500/MT.
5. NMDC increased iron ore prices w.e.f 11 Mar’16 by INR 70-150/MT it will increase sponge cost by INR 150-200/MT. While, global iron ore prices remained volatile last week and began at USD 62.6/MT, CFR China, then declined to USD 56/MT, CFR China towards the weekend.
6. Imported scrap offers jumped up by USD 10-20/MT in a week owing to high demand and tight supply. HMS was available at USD 210-215/MT and shredded at USD 220-222/MT, CFR India.
Week 12 key prospects
1. Semi finish market is likely to be volatile in days to come.
2. Few east India based pellet exporters were heard to talk over export prospects, thus in the coming time, Indian pellet export may pick up.
3. Increase in Pig iron rates and high imported scrap offers may support sponge prices as well. Demand for rebar may remain a concern.
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