Indian Steel Market Weekly Snapshot

During the week-35 (24-31st Aug’19), Indian domestic trade activities were better than the earlier as prices find support with improved spot trades. The mid sized steel mills reported slight fall in inventories amid lessened productions & surged inquiries.

As per SteelMint’s assessment, in these days the prices of Semis products – Sponge iron & Billet rise by INR 500-1,000/MT(USD 7-14). In line Finished long steel prices surged by INR 700-1,200/MT (USD 10-17).

However the Flat steel prices moved down by INR 250-500/MT (USD 3-7) through the traders end owing to poor lifting & limited demand.

IRON ORE & PELLETS

India’s largest iron ore miner – NMDC has decreased by INR 200/MT in both lumps and fines floor prices for Karnataka e-auctions. NMDC received a good response on 28th Aug conducted an auction for 40,000 MT iron ore from its Chhattisgarh mines with 32,000 MT getting booked at base price.

PELLEX decreased to INR 6,050/WMT (DAP Raipur) following reduced domestic offers on 30th Aug’19. SteelMint in conversation with market participants learned that Raipur (central India) based pellet manufacturers decreased offers by INR 200/MT to INR 6,000/MT (Ex-plant). Durgapur SteelMint’s reference, pellet price witnessed at 5,100-5,300/MT, down on weekly basis. Jindal SAW lowered pellet (Fe 63%) offers by INR 300/MT to INR 7,500/MT (delivered Kandla) as against INR 7,800/MT towards the beginning of this week.

— As per the SteelMint assessment pellet export realization has been declined this week to USD 92-95/DMT FoB (Al 3%) due to the oversupply and absence of bids.

COAL

Australian coking coal prices have remained relatively unmoved this week amid possible signs of market stabilisation, as buyers largely stayed on the sidelines and waited for a clearer market direction. Chinese spot market activities were muted in the seaborne coking coal market, following the divergence of premium low-volatile prices seen earlier.

Indian end-users seem to wait cautiously for prices to come down further, although a considerable demand from Indian buyers is expected to be generated later in this month as steelmakers resume restocking.

— Latest offers for the Premium HCC grade are assessed at around USD 150.75/MT FOB Australia and USD 167.75/MT CNF India.

SCRAP

The Indian market for imported scrap continued to remain silent for the 4th week in a row, with only scarce deals of the limited quantity being reported, even as offers continued to drop. Very low sales of finished steel due to floods and heavy monsoon has resulted in production cuts and maintenance for many furnaces and as a cascading effect, steelmakers are not requiring any major restocking of inventories.

Assessment for containerised Shredded from Europe, UK and USA stands at USD 290-295/MT, CFR Nhava Sheva, down USD 5/MT further against last week, however, no major fresh trades witnessed, while some global suppliers withheld their offers amid uncertainty in prices.

— HMS scrap saw very few deals being concluded as HMS 1 from Dubai being traded at around USD 270/MT CFR, while European origin HMS suppliers mostly remained away from the market.

FERRO ALLOYS

— Silico Manganese prices inched down marginally in Raipur. Producers believe the prices to go further down in line with tepid demand.

— Prices of Ferro Manganese are continuously falling in line with low demand and low-cost material available from imports.

— Indian Ferro Chrome prices have gone up in line with low supply as the Chrome Ore dispatches remain affected in Jajpur, which is resulting in shutdown and production cuts of Ferro Chrome.

— Ferro Silicon Producers have maintained the prices despite low demand and thin trading activities. Meanwhile, prices in Bhutan are lowered down amid Cash Crunch situation in the month-end.

SEMI FINISHED

On weekly basis domestic Semis prices rose in major locations, in which Billet offers gain by INR 500-1,000/MT and major hike was seen in Central, East & Northern India by INR 1,000/MT.

Inline Sponge iron offers surged by INR 300-900/MT, W-o-W. Meanwhile in Pig iron, the private mills have maintained prices at firm level amid average inquiries following drop furnaces production.

— The fresh export offers for sponge iron (79-80 FeM, 95-100% lumps) to Bangladesh reported at near to USD 265-270/MT CPT Benapole(dry port of India & Bangladesh), this is equivalent to USD 280-285/MT CFR Chittagong.

— India’s mid sized mills export offers to Nepal is hovering at USD 365/MT for Billet & USD 425/MT for Wire rod, ex-mill, Durgapur.

— Punjipatra, Raigarh based steel manufacturers are still facing problems of power cut by JPL. The plant’s are getting power supply of about 12 hrs (50%) per day.

— Rashtriya Ispat Nigam Limited (RINL) has invited a tender for export of 10,836 MT Billets, 10,836 MT Wire Rod to Nepal. Interested bidders can submit their bids till 5th Sep’19 at 14:00 hrs.

— Vizag Steel has issued an export tender of 25,000 MT basic grade steel making Pig iron (C: 3.5 – 4.8%; Mn: 0.50% max; Si: 1.5% max; P: 0.12% max; S: 0.050% max) for any country other than Nepal. The tender is due on 06 Sept’19.

— RINL has invited a tender for export of 15,000 MT Wire Rod and 30,000 MT Bloom. The due date for submission of bids is 5th Sep’19 (Bloom) & 6th Sep’19 (Wire rod). The delivery scheduled by 15 Oct’19.

FINISH LONG

Indian Finish long steel market observed moderate response this week as the rebar prices improved by INR 700-1,200/MT in overall region from week beginning and nominal lifting were also reported on this increased price range through major supplying locations like Jalna & Raipur but demand still needs to be framed in adequate level amid liquidity crunch.

— Current trade reference rebar prices (12-25 mm) assessed at INR 31,700-32,000/MT Ex Jalna, INR 30,400-30,700 Ex Raipur.

— Central region, Raipur based heavy structure manufacturers have increased their gauge parity by INR 200-400/MT (Light/Medium & Heavy) along with trade discount by INR 300-500/MT to INR 1,200-1,600/MT against last week and current trade reference price stood at INR 35,500-35,600/MT(200 Angle) ex-work.

— Trade discounts in Raipur Wire rod currently hovering at INR 1,500-1,700/MT and fresh offers stood at INR 30,700-31,300/MT ex-Durgapur & INR 30,100-30,600/MT ex-Raipur, size 5.5 mm.

— Further, the Raipur based wire rod manufacturers have reduced price gap by INR 200/MT to INR 2,400/MT (w.e.f. 28th Aug’19) between Wire Rod to HB wire.

FLAT STEEL

This week domestic HRC prices soften further by around INR 500/MT in few major markets as buyers are unlikely to make any new bookings with further expectations of downside in domestic HRC prices. Limited trades and lacklustre demand along with pessimistic buying sentiments lead to continual fall in domestic HRC prices. Meanwhile seasonal slowdown and liquidity crunch continue to keep domestic HRC prices under pressure in the domestic steel market.

As per SteelMint price assessment trade reference prices for HRC (IS2062, 2.5-8 mm) is currently at INR 36,500-37,000/MT ex-Mumbai & INR 36,500-37,000/MT ex-Delhi. Meanwhile domestic CRC also witness downturn by INR 500- 750/MT this week over limited trades. Thus domestic CRC (0.9 mm, IS 513) trade references prices on weekly basis are currently hovering around INR 40,500-41,000/MT ex-Mumbai & INR 40,000-41,800/MT ex-Delhi .Prices mentioned above are basic and extra GST@ 18% will be applicable.

Upside on Indian steel prices is expected as the demand starts to pick up with arrival of festive season approaching in upcoming months in domestic market. Thus traders have adopted wait and watch mode as major Indian steelmakers are planning to revise domestic HRC prices in first week of Sep’19.

Reference Prices as on 31st August 2019 (Week 35)

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

Indian Export Reference Prices as on 31st Aug’19

Prices in USD/MT
Source: SteelMint Research