Indian Domestic Billet Prices Hit All Time High - SteelMint Data

Bringing cheer to Indian steel manufacturers, prices of steel billets hit an all-time high, according to data maintained by SteelMint from the year 2010. However trade participants believe that highest level was reported in 2007-2008.

Spot prices in the last trade recorded at INR 34,900-35,100/MT (USD 537-540) ex-Raipur and INR 35,500-35,700/MT (USD 547-550) ex-Mumbai, for induction grade billet carrying a chemical composition of (S+P: 0.110-0.120, Mn: 0.50-0.55, C: 0.15-0.25) for size 100*100/125*125 mm on ex-mill basis. Prices excluding 18% GST.

Factors Supporting Prices

1. Implementation of E-way bill: After the roll out of E-way bill for all inter state movement of goods on 1st April 2018, unaccountable sales has reduced leading to increase in cost.

2. Widening price difference between large and medium manufacturers which is currently hovering at INR 5,000-6,000/MT (USD 76-93) against an average level of INR 3,000-4,000/MT (USD 46-62).

3. Improved demand from government's affordable housing sector.

4. Large mills focusing more on flat steel than longs on better realizations in domestic and export market.

5. Pre election year: Steel makers claim that government spending is high amid upcoming elections in 2019, leading to strong domestic demand.

Things to look out for

1. Resumption of iron ore mines in Odisha, which may bring Iron ore prices down.

2.Chinese mills increase output post winter cuts, which got over in 15th March 2018. This may bring some Chinese steel in the seaborne market.

3. Indian steel exports have not been good in last few months owing to falling global prices and ongoing anti dumping investigation in Europe.

Market Anticipation

Market participants anticipate prices to remain high for next few weeks as industry is moving to more organized and accountable sales. But at the same time expected increase in steel production and lower export orders may put some pressure on market.