What is Driving Indian Billet Prices to Fall?
Indian domestic billet prices drop by INR 400-1,000/MT(USD 6-14) in last one month. Current prices for induction grade billet (which is more popular in merchant market) hovers at INR 32,600/MT (USD 466) ex-Mumbai.
Factors that are driving Indian billet prices down are:
1. Subdued demand in domestic market owing to lower number of government projects and liquidity issue.
2. Global billet prices have dropped due to supply/demand mismatch. Prices have corrected about USD 40/MT globally in last two months.
3. Indian billet exports have dropped owing to competitive offers from other countries. Export volumes have dropped by 37% in October.
4. Appreciating Indian currency does not support exports from India. Indian Rupee has appreciated 1.73% against USD in last one month.
5. Global scrap prices have dropped significantly by USD 15-20/MT in last one month.
6. Indian iron ore prices are under pressure on rising production. Prices have corrected by 20-25% in last one month. This has also led to fall in domestic sponge iron prices.
7. Billet exports from Iran at a competitive price is making way to global market despite US sanctions.
Monthly Average Prices as on 8th January 2019
source: SteelMint
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