Weekly: Indian steel market snapshot

During the week-30, Indian domestic trade activities turned strong with rising raw material prices amidst supply shortage. The mid sized steel mills reported improvement in spot trades despite rally in sponge prices on rising iron ore & pellet prices.

As per SteelMint’s assessment, in these days the prices of semis products – billet & sponge iron raised INR 500-1,700/t ($6-23). Along with this, finished long steel prices also increased by INR 100-1,400/t through the mid-sized mills.

Iron Ore & Pellets

Essel Mining – a major Odisha-based merchant miner – has increased its iron ore fines and lump offer by INR 300-350/t w.e.f 23rd Jul’20. Supply tightness in Odisha has lifted domestic iron ore prices. Other miners also hike offer around INR 300-350/t for fines.

• SteelMint’s bi-weekly domestic pellet index “PELLEX” moved up by INR 300/t on this week to INR 6,600/t DAP Raipur. Raipur-based pellet makers made limited offers as they have sufficient prior bookings for export & domestic markets. Durgapur based pellet maker hike pellet offer this week to INR 6,300/t Exw. Bellary pellet maker sold around 50,000 t pellets this week at the range of 5,700-6,000/t Exw.
• An Odisha based pellet maker concluded 55,000 t export deal to China at $116-117/t CFR China for Aug shipment.

Coal

Australian premium low-volatile (PLV) hard coking coal (HCC) prices weakened further this week on lower bids indicated by Chinese market participants, as most of the buyers were struggling with limited import quotas.

India’s coking coal inventories remain high; but there is hope that the end of the monsoon season in September-October would lead to increased seaborne coking coal buying in Q3 FY21. This, however, clearly depends on flattening the Covid-19 infection curve in India.

• Latest offers for the Premium HCC grade are assessed at around $111.50/t FOB Australia, $121.00/t CNF China and $123.35/t CNF India.

Ferrous Scrap

This week, imported scrap offers to India for HMS observed a slight uptick and shredded offers remained mostly sable against last week’s closing, while trades to India were witnessed to be quiet.

• SteelMint’s assessment for containerized Shredded 211 from UK/Europe rest at $290/t CFR Nhava Sheva, however, no trades have got concluded this week, due to major difference between buyers bid price and global suppliers offer.
• HMS 1 from UK/Europe, is being offered at around $275/t CFR Nhava Sheva and good quality of HMS stands in the range of $265-270/t CFR basis, depending on the origin. Whereas, UK origin HMS 1&2 (80:20), is being reported at around $260/t CFR Nhava Sheva.
• HMS 1&2 (80:20) from West African origin being reported at $250-255/t CFR basis to Goa, up by $2/t against last week’s closing and Brazil origin HMS 1&2 (80:20) stands in the range of $265-266/t CFR.

Ferro Alloys

• Silico manganese prices remained stable, with a marginal downward shift of around INR 500/t w-o-w. Meanwhile, dispatches have improved in Raipur and domestic demand remains moderate, while, export demand remains dull.
• Ferro manganese prices in the domestic market shifted downwards amidst dull demand and limited transactions. Meanwhile, exports prices fell by up to 3% w-o-w for HC 75% grade.
• Indian ferro chrome prices remain scattered depending on the level of inventory with the producers. Deals are mostly being concluded at around INR 61,000/t ex-Jajpur. Meanwhile, exports demand remains near to absent with increase in Chinese domestic production and all eyes are on the Chinese tender prices, scheduled for next week.
• Prices remained stable w-o-w as the producers are firm with their prices. The demand is relatively moderate in domestic market, while, exports remain absent.

Semi finished

On a weekly basis, Indian semis market showed improvement, in which domestic sponge iron offers surge by INR 800-1,300/t ($10-18) & billet by INR 500-1,700/t ($6-23).

• Indian sponge C-DRI (80 FeM, 100% lumps) export offers up by over $15/t to $255-260/t CPT Benapole, equivalent to $278-280/t CFR Chittagong, Bangladesh. However no major deals were learned as buyers were skeptical to book material at such a higher price.
• The mid scale mills billet export offers increased this week by $10-15/t to $395-397/t & wire rod offers by $ 5/t to $443-445/t, CPT Nepal, via road delivery.
• Steel grade pig iron prices increased by INR 300-700/t w-o-w due to rising billet prices & supply shortage in spot market.
• SAIL’s pig iron auction from Rourkela Steel Plant today fetches bid at INR 25,900-26,000/t against previous auction on16 Jul which was settled on a weightage average price of INR 24,400/t EXW.
• Vizag Steel has floated an export tender of 60,000 t blooms (150x150mm,3 SP/4 SP grade). The shipment is scheduled by the mid-Sep’20 from Gangavaram Port, and the tender due date is 13:00 hrs on 31 Jul’20.
• An Indian mill has concluded 30,000 t (150*150mm, 3SP/4SP grade) spot sale bloom export tender at $390-395/t, on FoB basis. The material is likely to be shipped for China by end-Aug’20.

Finished Long

India’s finish long steel prices in most of the major markets move up by INR 400-1,000/t w-o-w basic through medium and small scale mills, while in specified locations of central region (Raipur & Raigarh) rebar prices increased up to INR 1,500/t.

As per our conversation with market participants, strengthening raw material prices along with a few improved demand and trade activity in the market especially from the last couple of days are the major factors behind the hike in finished steel prices.

• Trade reference rebar prices (12-25mm) through mid sized mills assessed at INR 31,600-31,800/t Ex Raipur & INR 32,000-32,200/t Ex-Jalna
• Trade discount given by Raipur based heavy structure manufacturers is at INR 500-800/t and the trade price of 200 Angle is at INR 35,200-35,600/t EXW.
• Trade discounts in Raipur wire rod are currently at INR 700-1,000/t and trade reference prices stood at INR 32,300-32,600/t ex-Raipur and INR 31,800-32,000/t, ex-Durgapur, size 5.5mm.

Finished Flat

Domestic HRC prices increased by INR 500-1,000/t this week, as Indian buyers are accepting higher list prices announced by major producers last week.

Increased downstream demand and tight stocks with traders has increased demand for HRC, supporting prices. Meanwhile steel mills have raised their HRC export offers this week by $15/t in line with higher global prices. Also trade sources shared that there is a shortage of thinner-gauge material for prompt delivery since most of the mills are busy with exports of thicker gauge HRC (2.5mm).

SteelMint’s assessments of HRC and CRC prices-

• HRC (IS 2062, 2.5 – 8mm) prices were at INR 36,500-37,500/t (ex- Mumbai), INR 36,500-37,000/t (ex-Delhi), and INR 38,000-38,500/t (ex-Chennai).
• CRC (0.9 mm IS513 GR) prices were assessed at INR 42,000-43,250/t (ex- Mumbai), INR 42,000-43,000/t (ex- Chennai) and INR 41,500- 42,000/t (ex-Delhi). The prices mentioned above do not include 18% GST.

Indian mills are planning another round of price hike by around INR 1,500-1,750/t for Aug’20 deliveries.

Reference prices as on 25th Jul’20 (Week 30)

Prices are Exw & exclusive of GST

Indian export reference prices as on 25th Jul’20

Price in $/t
Source: SteelMint Research