Weekly: Indian Steel Market Snapshot

During the week 21, spot steel trades have improved in India’s major markets followed by increase in offers of mid sized mills upto INR 1,000/MT. Also trade volumes were reported to be better than last week, as per market participants.

According to producers, inventories have narrowed down as sufficient bookings were made by domestic buyers. As per SteelMint’s assessment, in these days the prices of semis products – sponge iron prices moved up by INR 100-300/MT, billet by INR 200-1,000/MT (USD 5-17) & finished long steel prices increased upto INR 900/MT. However, finished flat steel prices fell by INR 500-1,000/MT over limited trades in the domestic market.

IRON ORE and PELLETS

Odisha based Serajuddin mines had decreased iron ore lump offers by INR 500 (USD 7)/MT to INR 3,500/MT (ex-mines, including Royalty, DMF, & NMET) in the mid of this week. Odisha based merchant miners have received a decent response in iron ore lump bookings post price cut announced.

— Directorate of Mines & Geology (DMG) of Goa has announced e-auction for 2.495 MnT Iron ore on 27th May’20. The majority of the quantity put under auction is of low-grade with the highest grade (as per DMG analysis) reaching Fe 59.22%.

— PELLEX up by INR 100/MT to INR 5,950/WMT. One of the major Raipur based pellet makers sold around 10,000 MT pellets in the local market at INR 5,950-6,050/MT (DAP Raipur).

In another deal reported, a Raipur based pellet maker concluded a deal at INR 5,850/MT (DAP Raipur) recently, but the deal could not be confirmed from the pellet makers at the time of publishing this news. Durgapur based pellet maker has sold 3,000-4,000 MT pellets in the local market at INR 5,400-5,500/MT (Ex-plant). Bellary based pellet makers had concluded around 40,000 MT pellets in the local market at INR 6,000-6,300/MT (Ex-plant) this week.

— An Indian pellet export tender for 50,000 MT (Fe 63% grade with 2.5% Al) is heard to have received bids at around USD 106-107/MT, FoB India, as per credible sources report to SteelMint. Pellet export assessment for Fe 64% grade pellets with 3% Al at USD 101-103/MT, CFR China.

COAL

Australian premium low-volatile (PLV) hard coking coal (HCC) prices have recovered modestly over the past two weeks with bookings concluded at higher levels in China.

In China, healthy steel sales and production levels post lockdown have led to a resurgence in demand for metallurgical coal and coke. Chinese buyers are concerned about tightening port policies and considering higher cost incurred for procuring seaborne coals due to longer waiting time at the ports.

— Latest offers for the Premium HCC grade are assessed at around USD 116.00/MT FOB Australia, USD 127.25/MT CNF China and USD 125.20/MT CNF India.

FERROUS SCRAP

Inquiries for imported scrap by Indian buyers finally witnessed quite an improvement this week as mills open gradually, after remaining silent for almost 2 months now. Although very few trades were witnessed, with limited global offers in the market, on account of upcoming holidays.

— SteelMint’s assessment for containerized Shredded 211 to India from UK/Europe and North America stands at USD 277/MT CFR Nhava Sheva. Most offers currently stand in the range of USD 275-280/MT CFR, with demand from buyers at around USD 275/MT level.

— HMS 1&2 (90:10) from Australia was sold at USD 250/MT CFR. Offers for Australian origin HMS stand between USD 240-250/MT CFR, as per quality. HMS 1&2 (80:20) offers to the UK were observed at around USD 245-247/MT CFR on low availability in Europe.

— South African origin HMS 1 offers were reported at USD 250/MT CFR Nhava Sheva and USD 256-257/MT CFR Goa. West African origin HMS 1&2 (80:20) were offered to Goa at USD 235/MT CFR Goa, while buyers in Goa bid at USD 225-228/MT CFR for the same.

FERRO ALLOYS

— Silico Manganese prices have been falling throughout the week in line with low demand and rising selling pressure.

— Ferro Manganese prices fell despite limited production as demand remains scarce in the domestic market.

— Prices of Ferro Chrome went up during the latter part of the week owing to the increased Chinese tender prices. Demand remains dull in the domestic market.

— Indian Ferro Silicon prices remained stable, with limited transactions. The domestic market remains dull.

SEMI FINISHED

On a weekly basis, Indian Semis market showed improvement, in which domestic Sponge iron offers surged by INR 100-300/MT & Billet by INR 200-1,000/MT (USD 3-13).

— Following hike in Indian domestic sponge prices, export offers raised by USD 5/MT to USD 270-273/MT CFR Chittagong, Bangladesh. However as per suppliers no fresh deals due to festive mood in Bangladesh.

— Pig iron prices surge by INR 500/MT in Raipur & Durgapur as a couple of private producers reported halt in operations this week, leading to temporary supply shortage in the merchant market.

— Billet export offers through the mid scale mills increased by USD 5-7/MT to USD 360/MT ex-mill at Durgapur, equivalent to USD 390/MT CPT Nepal.

— Vizag Steel has invited spot sale notice for export of 30,000 MT bloom in the ocean market. Deliver by the end of Jun’20.

— SAIL has floated two export tenders for 40,000 MT Mild Steel Non Alloys Concast Blooms from its Durgapur Steel Plant (DSP) & IISCO Steel Plant (ISP) West Bengal. For DSP offers valid till 26 May’20 & for ISP 30 May’20.

FINISHED LONG

The finished long steel market observed improved demand and price range increased particularly in the central and eastern regions by INR 700-900/MT. Whereas, other locations marked price rise of INR 300-500/MT on weekly comparison.

Healthy inquiries, prompt deliveries and low capacity utilization are few factors behind the rising price range of finished steel products.

— Trade reference rebar prices (12-25 mm) through mid sized mills assessed at INR 34,400-34,600/MT Ex-Raipur, INR 35,800- 36,200/MT Ex-Jalna & INR 36,500-36,800/MT Ex-Chennai.

— Raipur based heavy structure manufacturers have maintained trade discounts of INR 600-1,000/MT and trade reference price stood at INR 35,000-35,400/MT (200 Angle) ex-work.

— Trade discounts in Raipur wire rod are currently assessed at INR 300-500/MT and trade reference price is at INR 32,000-32,300/MT ex-Raipur and INR 32,000-32,500/MT ex-Durgapur, size 5.5 mm.

FINISHED FLAT

Domestic HRC prices fell by around INR 500-1,000/MT this week due to limited deals in the traders market. However markets are yet to resume fully. Meanwhile, absence of labors, limited orders along with disturbance in the payment cycle fueled bearish market sentiments and resulted in fall in prices.

— SteelMint’s current assessment for HRC (IS 2062, 2.5 – 8 mm) stands at INR 37,000-37,250/MT ex-Mumbai, INR 37,000-37,500/MT ex-Delhi. The CRC prices are assessed at INR 42,500-43,500/MT ex-Mumbai and INR 42,200-44,500/MT ex-Delhi. All prices mentioned above are basic, and extra GST @18% is applicable.

On the other hand, Indian steel mills raised HRC export offers by USD 15-20/MT and are offering at USD 430-435/MT CFR basis for July deliveries.

Reference Prices as on 23rd May 2020 (Week 21)

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

Indian Export Reference Prices as on 23rd May’20

Prices in USD/MT
Source: SteelMint Research