The downtrend for billet and rebar continued on Tuesday with buyers waiting for prices to come down before making purchases. Lull in construction activities due to cash crunch is also affecting demand. Supply continues to outpace demand.
The daily Davis Index for billet in Raipur dropped by Rs700/mt ($9.56/mt) at Rs37,400/mt ($510.92/mt) ex-works on Tuesday following a drop in rebar prices. Few billet deals were reported at Rs38,200-38,300/mt.
Steel mills feel there is less scope for any further drop in ingot and billet prices, otherwise IFs and EAFs will have to bear losses. Production is happening at full swing but demand is weak at these prices, causing inventories to rise, and forcing prices down.
Pellet Sponge prices are at Rs25,500/mt ($348.36/mt) ex-works Raipur, down by Rs500/mt ($6.683/mt) while the index for rebar dropped by Rs1,000/mt ($13.66/mt) at Rs42,000/mt ($573.77/mt) ex-works Raipur due to subdued demand.
In Mumbai, the daily index for billet dropped by Rs1,200/mt to settle at Rs39,000/mt ex-works with limited deals reported at index price. The index for rebar also dropped by Rs1,000/mt as inventory levels rose due to weak buying. Mills in Mumbai held rebar prices on Monday but due to weak demand, they had to reduce offers on Tuesday.
In Mandi Gobindgarh, the daily index for ingot fell by Rs600/mt to Rs37,600/mt, in line with decrease in local scrap prices. In Ludhiana, the bi-weekly index for ingot fell by Rs1,900/mt to Rs37,900/mt ex-works Ludhiana from last Thursday. Prices declined by Rs1,000/mt from Monday on lack of demand and in accordance with the dip in Mandi Gobindgarh market.
In Jalna, bi-weekly index for rebar declined by Rs1,500/mt to Rs47,000/mt ex-works while the index for billet declined by Rs800/mt to Rs39,000/mt ex-works.
($1=Rs73.27)