Weekly : Indian Steel Market Snapshot

In week 7, 2020 spot steel trades in Indian secondary market remained slow and producers quoted poor material lifting amid limited inquiries.

As per SteelMint assessment, this week prices of Semis & Finished long steel products have declined by INR 100-600/MT (USD 1-8) through the mid sized mills in major producing states.

Inline with this, Finished Flat steel prices dropped by INR 250-700/MT (USD 3-10) through the traders end owing to weak demand amid rising inventories.

IRON ORE and PELLETS

NMDC iron ore auction from Chhattisgarh Mines conducted towards the beginning of this week received flat bids. Out of 20 iron ore and manganese mines put on auction, 15 blocks have been successfully auctioned till 14th Feb’20. Odisha iron ore fines price for Fe 63% stands at INR 2,300-2,400/MT (Ex-mines, included Royalty, DMF & NMET) this week.

— PELLEX moved down this week by INR 200/MT to INR 6,600/wmt (DAP Raipur). Raipur based pellet makers have revised offers to INR 6,700/MT against last offer at INR 7,400/MT ex-plant. One of the steelmakers from Raipur concluded 5,000 MT pellet deal from nearby Raipur location at INR 6,650-6,700/MT (DAP Raipur).

— As per sources, JSW booked around 40,000-45,000 MT pellets from Bellary last week at INR 6,900-7,000/MT ex-plant. Pellet prices in southern India have remained supported on tight supplies. Bellary based major pellet makers sold around 15,000 MT pellets for Fe 63% grade at INR 7,200/MT this week.

— KIOCL has concluded two pellet export deals of Fe 64% grade pellets with less than 2% Al was reported to be concluded at USD 111.5/MT, FoB India. SteelMint assessment for standard grade pellets (Fe 64%, 3% Al) stands at USD 118/MT, CFR China.

COAL

Seaborne premium low-volatile (PLV) hard coking coal (HCC) prices inched higher this week amid expectations of a tightness in Chinese domestic and Mongolian coal supplies. The Mongolia-China borders will be closed temporarily till March 2, after confirmation of coronavirus cases in Inner Mongolia. The measure was implemented in a bid to contain the spread of the virus.

With Mongolian coal supply now curtailed, Chinese steelmakers had to look for alternatives, as domestic coal mines have not yet fully resumed production, and was still hampered by logistics issues.Metallurgical coal markets outside China saw new bookings done at higher levels on an FOB basis on Friday. However, as prices rallied, some buyers became cautious and adopted a wait-and-see approach.

— Latest offers for the Premium HCC grade are assessed at around USD 153.50/MT FOB Australia, USD 165.00/MT CNF China and USD 164.60/MT CNF India.

FERROUS SCRAP

After the surge in global scrap prices on the back of a strong rebound in Turkish deals, imported scrap offers have up by around USD 15-20/MT in just a week’s span. Indian buyers seemed hesitant to actively procure at these price levels after booking decent volumes earlier this week.

SteelMint’s assessment for Shredded 211 to India from USA and UK/Europe now stands at USD 290-295/MT CFR Nhava Sheva up from USD 280-283/MT last week. Although amid continues rise this week, offers are now in the range of USD 296-300/MT, most buyers are bidding significantly lower at USD 285-290/MT, leading to very limited trades towards the end of the week.

— Dubai HMS 1 (no ci gi) offers stand at around USD 292-295/MT, with few trades getting concluded at around USD 290-292/MT over the previous few days.

FERRO ALLOYS

— Silico Manganese prices remained stable as the increased supply got negated by the Imported Manganese ore prices going up.

— Ferro Manganese prices reduced marginally amid down-trending demand. Although, the number of producers for Ferro Manganese is few restricting any sharp fall.

— Prices of Ferro Chrome fell amid a dull export market. Producers are waiting for the Chinese buyers to return from their extended holidays due to deadly Coronavirus outbreak.

— Indian Ferro Silicon prices remained stable amid short supply. Producers are facing a shortage of Charcoal and this has led to substantially reduced production.

SEMI FINISHED

Indian billet trades slow-down this week as prices slump by INR 100-600/MT amid poor off take of finished goods. In these period major fall of INR 500-600/MT in billet seen in central & southern India.

Similarly, Sponge iron offers dropped by INR 100-500/MT W-o-W following significant fall in Billet prices & strong supply.

Also, pig iron demand has weaken on account of falling steel prices and as per assessment offers moved down by INR 300-700/MT W-o-W. Meanwhile in central India it declined by INR 1,400-1,700/MT, M-o-M.

— Jindal Steel has reduced steel grade pig iron prices by INR 300/MT to INR 28,500/MT ex-Raigarh, Central India.

— Indian sponge iron (80 FeM, 100% lump) export offers drop by USD 5-10/MT W-o-W and stood at around USD 285-290/MT CPT Benapole (dry port of India & Bangladesh), equivalent to USD 300-305/MT CFR Chittagong, Bangladesh.

— SAIL’s Rourkela Steel Plant tender held on 13th Feb’20 to sell about 2,450 MT steel grade pig iron & had received weak response. The base price for the tender was quoted by RSP at INR 30,300/MT and 100% material remained unsold.

— SAIL has floated an export tender for 18,900 MT prime mild steel non alloy concast billets (150*150 mm) offered from IISCO Steel plant. The last date for bid submission is 18 Feb’20.

— Indian mid scale mills export offers to Nepal drop by USD 10-15/MT W-o-W and learned at around USD 405/MT for billet & USD 450-455/MT for Wire rod, ex-mill at Durgapur.

FINISH LONG

Indian Finish Long Steel couldn’t observed smooth supply movement due to limited trade volume amid lack of buying inquiries and the price fall by INR 100-600/MT (w-o-w) in most of the regions.

However, few specific locations managed to get marginal upward movement and from last couple of days market sentiments slightly improved as major prices in supplying locations evolved by INR 200-300/MT.

— Current trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 32,900-33,100/MT ex-Raipur, INR 35,300-35,500/MT ex-Jalna & INR 34,900-35,300/MT ex-Chennai.

— Central region, Raipur based heavy structure manufacturers have decided to abolish the trade discount in heavy sizes and Current trade reference prices stood at INR 35,800-36,000/MT (200 Angle) ex-work.

— Trade discounts in Raipur wire rod is currently at INR 200/MT and trade reference prices stood at INR 32,400-32,600/MT ex-Raipur and INR 32,700-33,000/MT ex-Durgapur, size 5.5 mm.

FINISH FLAT

This week the domestic HRC prices softened by INR 250-700/MT in trade segment amid higher stocks in hand and sluggish buying.

Thus, the current trade reference prices for HRC stands at INR 39,000- 39,500/MT ex-Mumbai, INR 38,750-39,000/MT ex-Delhi, and INR 39,750 – 40,000/MT ex-Chennai. And the trade reference CRC (0.9 mm, IS 513) prices on a weekly premise assessed at INR 45,000-46,000/MT ex-Mumbai, INR 43,250- 44,500/MT ex-Delhi, and INR 45,500-46,000/MT ex-Chennai. Prices mentioned above are basic, and extra GST at 18% will be applicable.

Market participants shared that low sales amid limited inquiries have resulted in increasing stocks this week. Demand continues to remain lackluster in the domestic market, which in turn, trimmed the profit margins of stockists. Also, the recent price hike made in the month of Feb’20 was difficult to absorb since demand didn’t pick up in the domestic market.

Reference Prices as on 15th February 2020 (Week 7)

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

Indian Export Reference Prices as on 15th Feb’20

Prices in USD/MT
Source: SteelMint Research