Indian Steel Market Weekly Snapshot

Indian Steel market reported mix price movements during the Week-21 (21-26 May). In these days domestic trade activities were moderate although short supply of Billet due to power disruptions has led to support prices.

As per SteelMint assessment, during the week prices of Billet have increased sharply by INR 500-1,000/MT (USD 7.5-15) & Rebars upto INR 1,700/MT (USD 25) in particular regions. However, sponge market registered price fluctuations of INR 200-700/MT in major markets.

Coming to price movements of Flat steel, the prices registered downfall of about INR 500/MT (USD 7.5) in traders market over limited purchase inquiries.

Iron ore and Pellets: National Mineral Development Corporation (NMDC), Chhattisgarh increased prices by INR 100-170/MT this week. Baila fines prices have moved up by INR 100/MT and prices of Baila lump and ROM by INR 150/MT. DR-CLO prices have increased by INR 170/MT. Following price hike in Chhattisgarh, NMDC has raised prices in Karnataka e-auctions as well. NMDC Kumaraswamy has increased Lumps(Fe 62.5%) base price around INR 100/MT to INR 3,085/MT (basic) against last assessment INR 2,993/MT, similarly, in Fe 62.1% Fines prices have increased by around INR 50/MT to INR 2800/MT (basic) against last assessment INR 2756/MT.

Pellet makers have raised prices following price hike by National Mineral Development Corporation (NMDC) C.G in Central India (Ex-Raipur) by INR 200-300/MT. In Durgapur (eastern India) reference pellet price came down by INR 100/MT W-o-W. Later in this week, Jindal SAW Western India Pellet Maker has also decreased its offer by INR150/MT. Southern India based pellet makers have stable offers amid moderate demand in the region.

Scrap: This week buying interest for containerized imported scrap remained subdued on the effect of currency depreciation and concerns over arriving monsoons in India. Most of the importers remain in the ‘Wait and Watch’ mode to analyse the correct price trend in the global markets amid a disparity between expectations and the offers quoted by sellers. However, towards closing of the week prices have moved down sharply.

Price assessment in containers for Shredded from UK/Europe stood at USD 375-380/MT while offers from USA were quoted in the range of USD 378-382/MT, South African HMS 1&2 assessed at USD 370-373/MT and Dubai origin HMS 1 at USD 373-375/MT on the CFR Nhava Sheva basis.

2-3 bulk mix scrap cargoes which were booked during last 10-15 days from USA at around USD 385-390/MT, CFR Kandla reported this week. While West African and European HMS assessed in the range of USD 345-360/MT, CFR depending on the quality of scrap.

Krishnapatnam Port Company Limited (KPCL), the country’s largest all-weather; deep water port, on the east coast of India, announced that it has obtained permission from the Central Government of India for import of scrap. The port is setup with advanced Rapiscan system to provide immense ease of operations without additional delays for handling.

Coking Coal: Prices in the seaborne coking coal market remained largely stable this week, with market participants still monitoring the rail capacity situation on the Goonyella line in Queensland, Australia. Moreover, end-users in China have already stocked up several rounds in the past few months, keeping demand for the steelmaking raw material flat. Nevertheless, Coking coal demand has been underpinned by steel production growth in Asia—China produced 212 million tonnes of crude steel in the first three months of 2018, up 5% year on year. Further, China’s domestic coking coal prices picked up strength this month due to a recovery in the coke market coupled with aggressive restocking by cokeries and freight rate increases. Import offers for the premium low-vol HCC grade are assessed at around USD 184.75/MT FOB Australia, which amounts to USD 199.10 CFR India.

Semi Finished: In a week duration, domestic billet offers rise in the range of INR 500-1,000/MT (USD 7-15) in major markets. As per billet producers in Central, East & West India they have good bookings in hand for that they are not looking for price corrections.

Although, the sponge producers in Central & East India, which are the key suppliers of sponge pan India stated that no major bookings with them and are willing for healthy deals. The market participants also mentioned that due to seasonal low production productions of Ingot/Billet, sponge inquiries has slow down which in turn mount selling pressure with the producers.

— Indian Sponge iron export deals remained thin for Bangladesh owing to Ramadan season and sufficient stock with the local mills. The export offers to Bangladesh for lumps of grade FeM 78-80, hovering at USD 355-360/MT CPT Benapole (dry land port of Bangladesh & India) and USD 375-380/MT CFR Chittagong, Bangladesh

— The latest billet export offers for Nepal of Indian Induction grade billet (100*100 mm) stood at around USD 535-540/MT, in the previous week it was hovering at USD 530/MT/MT ex-mill, Durgapur. Further, the Odisha, Rourkela based manufacturers also raised billet export offers to USD 525/MT as against small trades a week ago at USD 520-522/MT ex-mill.

— Indian induction furnaces margins (conversion spread) stood 6 yrs high from P-DRI to Billet and recorded at INR 16,000-17,000/MT (USD 235-250) in Raipur & Durgapur.

— Jindal may hold power supply to Induction furnaces based in Jindal industrial park Raigarh from June 1st – 2018. As per Ingot/Billet manufacturers in Jindal’s punjipatra-Raigarh area (Central India), power supply have been reduced to 8 hrs from earlier about 16 hrs per day.

— In the initial days of week, NINL increased Pig iron prices for Steel grade by INR 500/MT to INR 30,500/MT (ex-Cuttack), however due to no major bookings the company has rolls back its prices by INR 500/MT in the end of week. While bulk purchase discount remain unchanged at INR 200-400/MT.

Finish Long Steel: As per week assessment, Finish long Steel acquired positive sentiments on the basis of improved inquiries & supportive trade volumes in specified major locations. In the Finish long steel price ranges has been elongated by around INR 500-1,700/MT (USD 7.5-25) commodity wise (Rebar, Angle/Shapes, Wire Rod & Pipe).

— Rathi Steels based North region increase the rebar price range by around INR 1,750/MT on week basis and currently offering at INR 45,100/MT, 12 mm, Ex-work, & excluding GST.

Further, market participants anticipate existing demand will accommodate the price level in comfort zone in coming week due to certain factors i:e; Power issue in Central region (Raigarh) & E-way bill implementation in few of West region Maharashtra w.e.f. 25.05.18.

Currently Rebar price assessed at INR 41,300-41,500/MT ex-Jalna, INR 41,000-41,200/MT ex-Raipur, INR 40,700-41,000/MT ex-Chennai. All prices are basic & excluding GST.

Flat Steel Market: This week domestic flat steel prices decline further up to INR 500/MT in traders market. Lower sales volumes, sluggish demand and slump in trade activities resulted to fall in flat steel prices in domestic market.

Currently trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed at INR 45,500/MT (ex-Mumbai), INR 45,750/MT(ex-Delhi), INR 46,000/MT (ex-Chennai).The prices mentioned above are basic prices excluding GST @ 18%.

Trade reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 51,000-51,500/MT (ex-Mumbai),INR 52,500/MT (ex-Delhi) and INR 51,500/MT (ex-Chennai).The prices mentioned above are basic prices excluding GST@18%.

Meanwhile market sources commented that in fewer regions traders are facing the problem of liquidity crunch so they have started providing rebates and discounts on cash payments.

However traders and end users are reluctant to purchase the material at higher prices and are eyeing for price announcement in the month of June.

Last week also flat steel prices declined by INR 500/MT over weak purchases in domestic market.

Indian Raw material and Finished Steel reference Prices as on 26 May 2018 (Week 21)

Prices are Ex-works, Exclusive of GST at 18%

Indian Export Reference Prices as on 26th May’18

Prices in USD/MT
Source: SteelMint Research