Weekly: Indian steel market snapshot

• Indian spot steel trades in secondary market remained dull over the week 39 on limited buying inquiries and furnaces curtailing production.
• Semi finished steel prices fell sharply by INR 300-1,300/t following which rebar offers also declined by INR 200-1,200/t.
• However mills raised HRC, CRC prices further on tight availability

Iron Ore & Pellets

• SteelMint’s pellet export index (FoB east coast India) has decreased sharply by $12/t w-o-w to $115/t on 23rd Sep’20 amid plunge in global spot iron ore fines price and limited buying interest from Chinese mills due to price volatility.
• SAIL conducted an auction for 28,000 t iron ore fines (Fe 61%) from its Dalli Rajhara mines in Chhattisgarh on 24th Sept 2020. The entire quantity received bids at INR 3,720/t (loaded into rakes and including royalty) against the base price INR 2,700/t as per sources.
• SteelMint domestic pellet index “PELLEX” down further by INR 200/t to INR 8,700/t DAP Raipur, amid limited buying inquiries during the week.
• Southern India based pellet maker – KIOCL had concluded a domestic sale tender of about 55,000 t pellets (Fe 63%)at the beginning of this week. The tender was concluded at INR 9,400/DMT FoB Mangalore port basis.

Coal

• Australian premium hard coking coal (PHCC) price rose another $6-7/t during this week, as overall buying interest remained steady despite moderate trading in the Asian spot market.
• Latest offers for the Premium HCC grade are assessed at around $139.00/t FOB Australia, $148.50/t CNF China and $151.90/t CNF India.

Ferrous Scrap

Imported scrap prices to India have corrected further this week. Comparatively less trades were reported this week due to softening market sentiments in secondary finished steel segment, sources reported to SteelMint.

• SteelMint’s assessment for shredded scrap in containers of UK origin stands at $312/t CFR Nhava Sheva, down by $6/t w-o-w. Suppliers’ offers stand at around $310-320/t CFR levels. Few traders indicated marginal increase in offers after Turkish mills resumed bulk bookings at increased offers.
• On the other side, sources believe that offers may remain at the higher side, due to strong domestic market sentiments in the USA and high scrap yard costing, which are likely to keep the scrap prices high.

Ferro Alloys

• Prices of silico manganese fell in the domestic market amidst dull demand. Producers are waiting for MOIL to release the prices. Current assessments are at INR 59,500-60,000/t exw Raipur and INR 60,500-61,000/t exw Durgapur.
• Prices of ferro manganese came down by INR 1000/t both in Durgapur and Raipur amidst slow demand. Prices are at INR 61,000/t in Raipur and INR 61,500/t exw Durgapur.
• Ferro chrome market remained stable with very limited buying ahead of chinese tenders. Market is on wait and watch mode as they are waiting for the major stainless steel mills in China to release purchase prices.
• Indian ferro silicon prices have been stable for weeks now, however, the demand is quite low now as all the major buyers have fulfilled their requirement for the month.

Semi Finished

This week, Indian Semi finished steel market observed less than average demand as billet offers plunged in the range of INR 100-1,000/t. Sponge iron offers dropped by INR 400-1,300/t & majorly in east India – Rourkela & Durgapur by INR 1,000-1,300/t ($13-18) w-o-w.

• Vizag Steel has floated two export tenders for 60,000 t blooms (30,000 t each) for mid-Nov’20 shipments. The due date for both the tender is 1 Oct’20.
• Jindal Steel is offering steel grade pig iron at INR 27,200/t exw Raigarh, central India.
• SAIL has scheduled an auction for 6,000 t mixed prime steel grade pig iron on 29 Sep’20 from its Bhilai Steel Plant (BSP), Chhattisgarh.
• Vizag Steel has conducted an auction for around 5000 t pooled iron on 24th Sep. The auction received good participation as entire material received bids at around INR 23,500/t exw.
• Tata Metaliks has reported the shutdown of one of its blast furnaces at Kharagpur plant for maintenance and repair (including hearth profiling) from 19 Sep’20.
• Induction grade billet export offers drop this week by $10-12/t & stood at around $394-396/t exw Durgapur, equivalent to $420-422/t CPT Nepal, via road delivery.
• Indian sponge iron (80 FeM, 100% lumps) export offers fell by $5-10/t, w-o-w, to $295-300/t CPT Benapole, equivalent to $315-320/t CFR Chittagong, Bangladesh. The prices slump due to weak demand & decline in Indian domestic prices.
• Domestic pig iron prices remained downtrend and corrected by INR 200-500/t w-o-w, due to weak demand on declining billet prices.

Finished Longs

India’s secondary finish long steel market remained sluggish in this week as well, due to less buying inquiries and inadequate bookings from the end user. Lockdown imposed by the district administration in the central region (Raipur), while rainfall observed in some cities of western n southern region in the mid of the week.

All these factors influenced the trade activities in the market and contracted the rebar prices by INR 200-1,000/t in most of the locations.

• Mid scale mills wire rod export offers fell by $5-7/t to around $440/t exw Durgapur, equivalent to $465/t CPT Nepal.
• Trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 32,200-32,400/t exw Raipur, INR 33,100-33,500/t exw-Jalna.
• Trade discount given by Raipur based heavy structure manufacturers is at INR 1,000-1,300/t and the trade price of 200 Angle is at INR 36,100-36,500/t exw.
• Trade discounts in Raipur wire rod is at INR 1,100-1,300/t and trade reference prices stood at INR 32,500-32,900/t exw Raipur, INR 32,300-32,800 Durgapur, size 5.5 mm.
• Bokaro (Jharkhand) based Electrosteel Steels Limited (ESL) has resumed wire rod production after a maintenance shutdown of 25 days.

Finished Flats

All major Indian steel producers have announced consecutive price hikes in HRC, CRC for the month of September due to robust domestic demand. Mills have raised CRC prices twice so far this month, except SAIL, increasing thrice this month.

In the beginning of Sep’20 steel producers raised HRC prices by INR 2,000-2,500/t and CRC prices by almost INR 3,000-3,500/t.

• HRC (IS 2062, 2.5 – 8mm) prices are assessed at INR 41,250-41500/t (exy-Mumbai),INR 41,500-42,000/t (exy-Delhi) while INR 42,000-42,500/t (exy-Chennai).Prices do not include GST extra @18%.
• CRC (0.9 mm IS513 GR) are currently seen at INR 50,000-50,500/t (exy-Mumbai), INR 50,000- 51,000/t (exy-Delhi) and INR 50,000- 51,000/t (exy-Chennai).Prices do not include GST extra @18%.

Factors behind consecutive price hikes

• Traders continue to restock the material in anticipation of a further increase in prices. Improved buying compelled mills to raise prices.
• Supply crunch in CRC due to maintenance issues in couple of steel mills.  I
• mproved demand in the auto, white and yellow goods sector prompted a further hike in CRC prices.

Outlook – Mills are planning for a further hike in flat steel prices for Oct deliveries. However further hike is accepted in the domestic market or not continue to remain uncertain.

Reference Prices as on 26th Sep’20 (Week 39)
Prices are Exw & exclusive of GST

Indian export reference prices as on 26th Sep’20
Prices in USD/MT
Source: SteelMint Research