India: SAIL Defective Billet and Slab Auction Receives Weak Response
Steel Authority of India Limited (SAIL), recently conducted auction from its Central India based Bhilai Steel Plant (BSP) for defective steel products on 13th Jul'19. Out of 42,602.48 MT steel put up for auction, only 10,093 MT (24%) material was sold out despite reduce base price by INR 700-1,000/MT (USD 10-15) as against last auction.
The base prices for this auction by SAIL (BSP) was quoted at INR 26,300-26,950/MT, which is down by INR 700-1,000/MT compared to previous auction held on 1st Jun'19 in which base price was at INR 27,300-27,650/MT; ex-Bhilai.
However few specific products managed to get concluded by 100% i.e. Billet as well as Slab and the major buyers was notified merchant re-rollers due to maintained chemical specifications as the material was blast furnace grade and size was above 110 mm compared with induction grade billets which offers assessed at INR 27,800/MT Ex-Raipur & size 100*100mm.
Factors behind weak response for scrap as only about 24% material get sold in SAIL’s auction-
It seems that significant drop in local scrap prices have resulted limited participation in BSP auction.
As per assessment the local HMS scrap (80-20) as well as end cutting scrap prices went down by INR 1,700-1,900/MT in a month and the price dropped on account of lessened production levels through the rolling mills due to fell finished steel - Rebar prices by INR 2,300/MT M-o-M.
In addition pig iron prices drifted down by INR 1,600/MT M-o-M, as per assessment made by SteelMint. Steel grade pig iron is considered as the substitute commodity against melting scrap.
source: SteelMint
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