Weekly: Indian steel market snapshot

Indian spot steel trades in the secondary market remained supported during the week 45, however later on the market has registered a slight correction on weekends. As per SteelMint’s assessment, the semi finished market sentiments have improved in which domestic sponge iron & billet offers surged by INR 600-1,500/t.

On the other hand, the finished long steel of mid-sized mills observed a sharp hike in prices of INR 800-1,700/t w-o-w basis in most of the locations. Increase in raw material cost led to rise in long steel offers as per market participants.

In context to finished flat steel, Indian steel mills have announced a steep hike in list prices of HRC by INR 1,000-1,250/t for November deliveries.

Iron Ore & Pellets

• NMDC has increased prices by 4-5% for Nov’20, sources have reported SteelMint. The prices for Baila lump and fines have been increased by INR 150/t and that of DR CLO by INR 170/t.
• SAIL has concluded 28,000 t iron ore fines (Fe 60.2%) auction from its Rajhara mines in Chhattisgarh at INR 3,310/t (Loaded into rakes and including royalty).
• SteelMint’s bi-weekly domestic pellet index “PELLEX” has increased to INR 9,750/t, DAP Raipur in recent deal. Around 15,000 t pellet deal has been concluded by a Raipur based pellet maker in this publishing window. Similarly, pellet prices in other regions like Durgapur and Bellary have also increased by INR 500-600/t w-o-w amid scarcity of high-grade iron ore and limited.
• SteelMint’s pellet export index (FoB east coast India) has remained largely stable on a weekly basis and stood at $126/t on 04th Nov’20. Sellers remained active in the domestic sales amid better realization and liquidity, resulting in limited export offers. No pellet export deal was recorded during the month.

Coal

• Australian coking coal prices have held mostly steady this week after their steep decline following China’s informal ban on Australian coal imports.
• Oversupply concerns loom large amid continued selling pressure on Australian coals as China-based importers became obliged to source coking coal from non-Australian origins.
• Indian spot demand stayed weak with buyers remaining on the sidelines hoping that offers could fall further in light of the current market weakness.
• Latest offers for the Premium HCC grade are assessed at around $108.00/t FOB Australia, $151.00/t CNF China and $119.25/t CNF India.

Ferrous Scrap

Imported prices for containerized shredded scrap reached their highest level since Jun’19, amid strong competing demand in Pakistan and Bangladesh. Offers have rallied due to lower scrap generation on pandemic and ahead of winter holidays. The disparity between offers and bids has put buyers on wait and watch mood, according to sources.

Also, hike in freight rates on a shortage of containers due to mismatch in imports & exports is another reason, lifted offers.

• SteelMint’s assessment for shredded scrap in containers of UK/EU origin stands at $328/t CFR Nhava Sheva, up by $5/t w-o-w.

Ferro Alloys

• Indian silico manganese prices remained stable w-o-w amidst moderate demand in both the domestic and export market with limited transactions. However, prices went up in Raipur as a material shortage kicked in due to pre-Diwali stocking by the steel producers.
• Prices of ferro manganese remained stable despite dull demand in the domestic market. Export demand remains low to moderate and the prices remain stable.
• Indian ferro chrome prices went down owing to dull demand in the market. Exports to China, are near to absent due to their increased domestic production. Meanwhile, current level of chrome ore prices has left the producers with no profit margin to operate.
• Indian ferro silicon prices came down amidst dull demand in the domestic market. Current offers are at around INR 77,500-78,500/t Ex-works.

Semi Finished

On a weekly basis, Indian Semis market showed improvement, in which domestic Sponge iron & billet offers surge by INR 600-1,500/t.

• Indian sponge iron export offers to Bangladesh rally by $20/t this week with fresh offers at $335/t CPT Benapole, equivalent to $345-350/t CFR Chittagong.
• Tata Metaliks has raised basic (steel) grade pig iron price by INR 1,100/t to INR 31,300/t & foundry grade by INR 700/t to INR 33,200/t ($447), ex-plant, Kharagpur, eastern India for Nov’20 deliveries.
• SAIL- Bokaro Steel Plant (BSL) conducted a pig iron auction for 2,850 t (1 rake) on 4th Nov. The entire quantity was booked at INR 29,550/t exw.
• SAIL conducted an auction for 6,000 t steel grade pig iron on 6th Nov. Out of offered quantity, 5,800 t was booked at a weighted price INR 28,800/t exw Rourkela.

Finished Longs

India’s finished long steel of mid-sized mills observed sharp hike in prices of INR 800-1,700/t w-o-w basis, in most of the major supplying locations. As per the market participants adequate demand, decent trade activity along with increasing raw material cost have led to increased the long steel prices.

• Trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 35,000-35,200/t exw Raipur, INR 37,200-37,600/t exw-Jalna.
• Trade discount given by Raipur based heavy structure manufacturers is maintained at INR 600-900/t and the trade price of 200 Angle is at INR 39,300-39,700/t exw.
• Trade discounts in Raipur wire rod is currently stands at INR 800-1,000/t and trade reference prices stood at INR 36,200-36,500/t exw Raipur, INR 36,600-37,000 exw Durgapur, size 5.5 mm.
• APL Apollo Tubes Limited has signed Memorandum of Understanding (MoU) with Zamil Steel Buildings India to develop a market for pre-engineered steel buildings (PEB) made from structural steel tubes.

Finished Flats

• Indian steel mills have announced a steep hike in list prices of HRC by INR 1,000-1,250/t ($13-17) for Nov deliveries. The price hike is backed by improved auto demand along with short supply hovering in the trade market.
• After the hike companies, effective price for HRC (2.5-8 mm) stood at INR 43,750-44,400/t and CRC (0.9 mm IS 513) at INR 53,000-53,750/t (exy Mumbai). Prices do not include GST extra @18%.
• On the other hand, trade reference prices stood at INR 44,500/t (exy Mumbai) and CRC (0.9 mm GR) was around INR INR 54,500/t (exy Mumbai). Prices do not include GST @18%.

Factors behind price hike

• SteelMint learned from its trade channels that few key steel mills have their plant maintenance scheduled and few breakdowns may result in a shortfall of supplies by around 150,000 t roughly this month.
• Amid the arrival of the festive-season Indian car and bike makers reported their best monthly sales growth in September.
• Imported HRC bookings remain limited. Thus, traders have to accept higher prices from integrated steel mills.
• India’s state-owned iron ore miner – NMDC has increased prices by 4-5% for Nov’20.

Reference Prices as on 7th Nov’20 (Week 45)

Prices are exw & exclusive of GST

Indian export reference prices as on 7th Nov’20
Prices in $/t
Source: SteelMint Research