India: SAIL-BSP defective steel sales rise 11% m-o-m in April

SAIL's flagship unit, Bhilai Steel Plant (BSP), in Chhattisgarh recorded defective steel sales at 32,716 tonnes (t) in April compared to 29,548 t recorded in March. Sales rose by almost 11% on the back of material shortage in the spot market, SteelMint understands.

SAIL-BSP conducted two weekly auctions for a total of 44,284 t of defective steel products in April. 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.

Bids drop

There was a noticeable fall in bids in April's auctions. The average bids for bloom-CC were recorded at INR 51,376/t, a m-o-m drop of INR 3,737/t compared to March.

The drop in bid prices came against the backdrop of dull finished steel movement and volatile semis market.

However, despite this, the auctions received decent bids backed by strong demand for scrap amid its shortage in the Raipur market.

Price trend

The monthly average of SteelMint's billet index was at INR 55,920/t in April, a fall of INR 1,250 /t m-o-m compared to INR 57,170/t in March.

Outlook

Market participants expect that domestic scrap prices will correct further as these saw an abnormal rise in the past few months. This will likely bring down bids in the upcoming auctions.

Likewise, sales may also be impacted by sluggish finished steel sales and a potential demand slowdown in the monsoon.