Weekly: Indian Steel Market Snapshot

Indian steel prices increased further throughout the week on active demand from the domestic & global buyers. This has resulted in limited inventories among producers along with sufficient orders for coming days.

As per SteelMint’s assessment, this week prices of Semi Finished steel products gained by INR 300-900/MT(upto USD 12) & Finished long products by INR 100-400/MT. However, domestic flat steel prices remained down trend and plunged about INR 500/MT (USD 7) during the week due to limited trade activities.

IRON ORE and PELLETS

Odisha based merchant miners have received decent response in iron ore lump bookings after the recent price cut announced.

OMC has scheduled its next iron ore lump e-auction on 1st Jun’20. The base price for the material offered from Koira mines was reduced by INR 450/MT, from Daitari mines reduced by INR 600/MT and that of Gandhamardhan mines by upto INR 350/MT.

— PELLEX stands at INR 6,000/wmt (DAP Raipur) in this week. Raigarh based pellet maker increased offers at INR 5,600-5,700 (Exw). Bellary based pellet makers have sold around 45,000 MT pellets at around INR 6,000-6,300/MT EXW.

— Few Pellet (Fe 64% grade with around 3% Al) exports deal concluded at USD 113-114.5/MT, CFR China. In another low-grade Fe 64% grade pellets with 2% Al concluded at around USD 107/MT, FoB India for the same June dispatches. However, SteelMint assessment for Fe 64% grade pellets with 3% Al stands stable this week at USD 111-113/MT, CFR China same against last week’s assessment.

COAL

Australian premium low-volatile (PLV) hard coking coal (HCC) prices have resumed their downtrend on lower offers due to weak physical demand seen in the Asian spot market.

The seaborne coking coal market saw ongoing negotiations in the premium hard coking coal segment, with sellers continuing to lower offers to attract demand from end-users. However, many buyers have been reluctant to procure seaborne cargoes in light of stringent port-clearance policies in China.

India-based steel mills have relatively high inventory levels at the moment, as the country has been on a lockdown since March 25. Latest offers for the Premium HCC grade are assessed at around USD 108/MT FOB Australia.

FERROUS SCRAP

Imported scrap offers to India remained stable on a weekly basis, while no major bookings were witnessed yet in the market. Although many mills in the country have started productions to some extent, most of them are at least a couple of weeks away from making fresh bookings for July shipments.

SteelMint’s assessment for Shredded 211 stands at USD 276-280/MT CFR Nhava Sheva, CFR, almost at the same levels as previous week. Although inquiries by buyers were witnessed & no major transactions were reported. Bushelling scrap bundles from Australia and the UK were reported at around USD 298-300/MT CFR.

Offers of HMS 1 from South Africa were reported at around USD 262-263/MT CFR, while HMS 1&2 (80:20) offers which were witnessed at around USD 255/MT CFR last week. Few trades of small quantities for HMS were concluded 5-6 days ago, however, in recent days, buying activity was silent

FERRO ALLOYS

— Silico Manganese prices fell throughout the week in both Raipur and Durgapur due to dull demand in the domestic and export market.

— Ferro Manganese prices decreased due to low demand in both the domestic and export market.

— Prices of Ferro Chrome increased in the domestic market owing to the increase in Chinese prices. Demand in the domestic market remains dull.

— Indian Ferro Silicon prices are stable despite dull demand in the domestic market. Meanwhile, the export market remained near to absent.

SEMI FINISHED

On a weekly basis, Indian Semis market showed improvement, in which domestic Sponge iron offers surged by INR 100-600/MT & Billet by INR 300-900/MT (USD 4-12).

— Sponge iron export offers surged by USD 5/MT to USD 270-275/MT CFR Chittagong, Bangladesh. The prices hike on account of increase in domestic offers, however no fresh deals reported for exports to Bangladesh due to festive mood.

— Pig iron prices up by INR 300-500/MT due to temporary supply shortage & improved demand in central & eastern India.

— Billet export offers through the mid scale mills increased to USD 370-375/MT ex-mill at Durgapur, equivalent to USD 400-405/MT CPT Nepal.

— Primary mills billet export offers increased by USD 10/MT to USD 380-390/MT EXW eastern India, equivalent to USD 400/MT CPT Nepal.

— Vizag Steel has invited spot sale notices for export of 10,000 MT Wire Rod and 30,000 MT Blooms in the ocean market. The last date for bid submission is 4 Jun’20.

— Jindal Steel offered steel grade pig iron at around INR 24,300/MT EXW, Raigarh.

— An Indian govt owned steelmaker has concluded export tender for 20,000 MT billet at USD 370-375/MT, on FoB basis.The cargo is likely to ship to Thailand from Haldia port and the shipment is scheduled for mid-Jul ’20.

FINISHED LONG

The Finished long steel market seems average trade volume considering current production level which is hovering around 70% across regions but future bookings are not upto the mark and price range up by INR 100-400/MT in few locations, as per weekly assessment.

It’s being observed among trade participants minor selling pressure might get placed in the near term amidst of amplifying production utilization. However, few trade associates based in specified regions shared limited workforce could affect production level.

— The trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 34,800-35,000/MT Ex Raipur, INR 36,000- 36,300/MT Ex Jalna & INR 36,200-36,600/MT Ex Chennai.

— Raipur based heavy structure manufacturers have maintained trade discounts by INR 600-900/MT and current trade reference prices at INR 36,300-36,600/MT (200 Angle) ex-work.

— Trade discounts in Raipur wire rod are currently assessed at INR 500-700/MT and trade reference prices stood at INR 32,900-33,300/MT ex-Raipur and INR 33,000-33,300/MT ex-Durgapur, size 5.5mm.

FINISHED FLAT

Indian HRC prices fell by INR 250-500/MT this week in few major markets on the back of limited trades happening in the domestic market. Labour availability has continued to remain a major concern and also prevailing lockdown in India until 31st May’20, which may get extended further up to Jun’20 has continued to keep trades on the lower side.

SteelMint’s current assessment for HRC (IS 2062, 2.5 – 8 mm) for trade segment stands at INR 36,500-37,000/MT ex- Mumbai, INR 37,000-37,500/MT ex-Delhi & INR 38,000- 38,500/MT ex- Chennai. The CRC ( 0.9 mm IS513 GR) prices are assessed at INR 42,000-43,000/MT ex- Mumbai, INR 42,000-43,500/MT ex-Chennai & INR 42,200- 44,500/MT ex-Delhi. The prices mentioned above are basic, and extra GST @18% is applicable.

Market participants shared that “Current demand in the domestic market is around 20-25% and Indian mills shall review the current prices and offer discounts in Jun’20. Also, a few mills have exported nearly 70% of their production which may, in turn, impact domestic supplies in the near term”.

On the other hand, Indian steel mills are likely to announce the price revision in domestic flat steel prices for June deliveries shortly.

Reference Prices as on 30th May 2020 (Week 22)

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

Indian Export Reference Prices as on 30th May’20

Prices in USD/MT
Source: SteelMint Research