Indian Steel Market Weekly Snapshot

Indian semi finished steel prices moved down this week over limited spot trades & increase supply of Sponge iron on seasonal improved production. On weekly comparison it fell near about INR 500-1,600/MT (USD 6-22/MT).

However towards the week end, the prices of Semis & Long products have started to rebound as buyers/stockiest have started to take positions anticipating less decline from current levels.

In the end of week – 39 (29th Sept), the prices of Sponge iron, Billet & Rebars have increased by INR 100-300/MT, day-on-day. Meanwhile, the Flat steel prices surge during the week by INR 500-1,000/MT in traders market ahead price hike announcement of INR 1,000-1,500/MT in October.

Iron Ore: National Mineral Development Corporation (NMDC) had announced a price hike w.e.f. 26th Sept 2018. The miner had increased Baila fines prices by INR 200/MT, Baila lump by INR 300/MT, ROM by INR 280/MT and DR-CLO by INR 360/MT.Following the hike in prices at its Chhattisgarh mines, miner announced a price hike in its floor prices of Karnataka e-auctions as well. OMC increased base prices for iron ore lump e-auction scheduled on 03 Oct’18 up to INR 800/MT against the last auction held in Aug.

Pellet offers in Indian domestic market are likely to decrease further amid limited inquiries and dull buying interest. Central India (Ex-Raipur) current assessment for Fe 63% pellets is at INR 8,800-9,000/MT (basic, Raipur) against INR 9,000-9,100/MT (basic) at the beginning of the current week. Buying interest is still INR 100-200/MT below than current offers resulting in limited trades. Indian pellet export market remains silent ahead Chinese week-long holidays starting from 01 Oct’18. Assessment remains stable at around USD 150/MT, CFR China for 3% Alumina pellets.

Indian scrap importers have observed stability in scrap prices amid limited trades reported this week. With no strong reason of sharp downward price correction in the near future, scrap market is likely to adjust price levels for fresh round of bookings amid currency seemed to settle down at the new lows ever since.

Offers for UK and Europe origin containerised Shredded scrap heard stable in the range of USD 360-365/MT, CFR Nhava Sheva. While strong demand pushed Dubai HMS 1 offers slightly up to levels USD 355-357/MT, CFR. Minor trades for South African HMS 1&2 in containers learned at around USD 345-350/MT, CFR Nhava Sheva.

Australian coking coal prices have been inching downwards since last week, as most Chinese buyers are still on the sidelines waiting for prices to fall after the increases earlier this month.

Although healthy steel margins can somewhat keep the steel-making raw material’s price supported, but not at current price levels, especially after coke prices began dropping sharply two weeks ago.

China’s domestic metallurgical coke prices have already dropped by RMB 100/MT and more decreases are likely to follow.

Notably, trading activity in the seaborne coking coal spot market was muted on Monday, 24 September with China and other East Asian markets on holiday for celebrating the Mid-Autumn Festival.

Latest spot prices for the Premium HCC grade are assessed at around USD 196/MT FOB Australia and USD 212.40/MT CNF India; while current offers for the 64 Mid Vol grade are assessed at around USD 178.20/MT FOB Australia and USD 194.60/MT CNF India.

Semi finished steel: Indian billet prices remain down this week by INR 500-1,400/MT. In this period major fall of INR 1,200-1,400/MT in billet seen in Rourkela & Durgapur due to limited inquiries and slump in sponge prices.

Further, Sponge iron offers being reduced by INR 400-1,600/MT in major markets. However, offers in Durgapur declined upto INR 1,600/MT over increased selling pressure amid Power cut by DVC.

— As per participants, small lots of export deals were concluded for Billet to Nepal. The deal price for the Billets reported at close to USD 475/MT, fall from a week ago at USD 500-505/MT, ex-mill, Durgapur. While few manufacturers offering as of now at USD 465-470/MT loaded to rake, Odisha.

— Indian sponge iron export deals to Bangladesh for lumps grade(FeM 78-80) reported at close to USD 378-380/MT CFR Chittagong, Bangladesh.

— Neelachal Ispat Nigam Ltd (NINL), India’s largest and state owned steel grade pig iron manufacturer & exporter has extended its price circular validity till 29th Sept which was expired on 27th Sept. The offers for Steel (N1) grade material was at INR 30,200/MT (USD 420), ex-Cuttack, Odisha.

— Jindal Steel has reduced prices by INR 300/MT and latest prices reported for Panther shots (Granulated pig iron) at INR 29,200/MT ex-plant, Odisha.

— RINL has invited a tender for export of 10,000 MT Billets, 25,000 MT Blooms and 5,000 MT Wire Rod whose bid submission was till 25 Sep’18. However, the company has gone for re-tendering amid limited participation. The new tender floated has due date of 03 Oct’18 -Sources.

— SteelMint’s Pig iron export price assessment stood at USD 363-375/MT FOB Brazil, USD 365-370/MT FOB Black Sea & USD 380-390/MT FOB India.

Indian Finish Long steel secondary market remained slow led by weakening semi finish and inadequate buying interest along with rising inventories in particular regions. This urged steel mills to adjust the price range as per demand.

Further, price range contracted by around INR 800-1,000/MT commodity wise and major reduction noticed in North & East region. As per market participants, they are expecting price range might improve slightly amid indications of price hike by large scale producers in Finish Long for Oct’18.

— Wire rod trade discount offered by manufacturers/suppliers in Raipur has remained more or less steady compared to last week which is now in the range of INR 900-1,400/MT depending on the quantity.

— Ghaziabad based medium scale structure manufactures have reduce the guage parity up to INR 1,000/MT in particular sizes in past week.

— In the beginning of the week, Vizag Steel (RINL) has marginally increased prices in rebar & rounds by INR 200/MT and wire rod by INR 250-300/MT (USD 3-4) for rest of Sep’18.

As per market participants, looking at continuous increase in iron ore prices, the large players (SAIL, Tata Steel RINL & JSW Steel, JSPL) are most likely to increase its long steel prices by about INR 500-1,000/MT in starting of Oct’18.

Currently, rebar prices will be offered by the large scale producers close to INR 43,400-43,900/MT ex-Chennai, INR 44,300-44,800/MT in Delhi/NCR, Size – 12 mm & excluding GST at 18%. And for Medium mill owners trade reference rebar (12-25 mm) price assessed at INR 38,900-39,300/MT Ex- Jalna, INR 38,000-38,200/MT Ex- Raipur, INR 42,100-42,400/MT Ex-Chennai. All prices are basic & excluding GST.

Finish Flat Steel: This week India’s domestic HRC & CRC prices increased by INR 500-1,000/MT in traders market on anticipation of increase in flat steel prices by major Indian steel mills in October.

Announcement regarding price revision is expected to be made shortly. Major mills have planned for price hike of INR 1,000-1,500/MT for October. However govt. owned mill – SAIL has already announced hike of INR 500/MT last week and revised prices have come into effect from 21st Sept’18.

Thus current trade reference prices for HRC (IS2062) 2.5 mm-8 mm is around INR 47,000-47,250/MT (ex-Mumbai) & INR 47,000-47,200/MT (ex-Delhi).The prices for CRC (IS513) 0.9mm is hovering in the range of INR 53,000-53,500/MT (ex-Mumbai) & INR 53,500/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST@18% on cash payment basis.

Increased iron ore prices,costlier imports and depreciated Indian currency along with govt’s proposed hike in steel import duty are the reasons which is supporting price hike by Indian mills.

Indian Raw material and Finished Steel reference Prices as on 29 September 2018 (Week 39)

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

Indian Export Reference Prices as on 29th September’18

Prices in USD/MT
Source: SteelMint Research