Indian Semi-Finished Steel Market: Billet And Sponge Iron Trends

The Indian semi-finished steel market, including billet and sponge iron, has seen a mixed trend from beginning of the week. The billet market in Mandi Gobindgarh (Punjab) is a benchmark for the Indian domestic market. However, the market has observed moderate demand for billet, and buyers have been cautious due to the approaching financial year-end.

Billet Prices Trending Positive In Major Markets

The recent revision in power tariffs in Mandi Gobindgarh (Punjab) and Chhattisgarh suggests that billet prices are unlikely to decrease further. Despite fluctuations in prices caused by average demand, rolling mills have managed to keep their rebar and wire rod offers range-bound with marginal changes. The sponge iron market has witnessed slight dullness, but sellers have been successful in maintaining rates within the expected range. Currently, the conversion spread from sponge pellets to billets is within the range of Rs 15,200-15,700/ton in the Central and Eastern regions.

Sponge Iron Market Volatility And Mixed Sentiments Among Buyers

The sponge iron market experienced a mixed performance recently, with some regions showing improvement while others remained dull. However, the volatile price movement has made the market risky, causing buyers to hold their positions when booking bulk orders.

Regional Market Overview For Sponge Iron Movement

• Central and Eastern Regions: In Raipur and Durgapur, sponge iron prices decreased by Rs 200-400/ton in the last two days due to weak demand and limited trades ahead of the financial year-end. In Rourkela, sellers kept prices high but with average buying, resulting in good inventory.
• Southern Region: The market noticed decent spot buying due to active trade in finished and semi-finished steel. Buyers are purchasing sponge iron in anticipation of a price increase in the near future, according to sources.

Future Outlook

Sponge iron prices are expected to be under pressure due to seasonal improved productivity and softening raw material prices. On the other hand, there are possibilities for furnace route steel prices to remain supported due to seasonal low production amid summers and overheating concerns.

Insight

The Indian semi-finished steel market has experienced mixed trends in the first week of trading. Billet prices have been supportive, and there is little expectation for major corrections in the near future. Sellers from various regions are hopeful that power concerns will rise, as seen in Mandi Gobindgarh (Punjab) and Chhattisgarh. However, the sponge iron market has been less active due to average demand. Different regions have displayed varying trends, with some markets witnessing high offers and limited trades, while others have seen decent spot buying.

Read more: Limited Demand Weigh On Indian Pellet Industry- Will It Bounce Back?