Weekly: Indian steel market snapshot

Indian spot steel trades in the secondary market remained slightly dull during week 48, however towards the weekend, the market registered a slight price recovery.

As per SteelMint’s assessment, this week prices of sponge iron, billet & rebar have fluctuated by INR 200-700/t, in which fall in price range was observed in central, east & northern regions, while the same hike has been observed in southern & western India.

Sharp hike in global scrap offers along with improved local finished steel demand resulted in price hike in coastal parts of India, where the mills are more dependent on scrap in terms of input cost. Notably, imported scrap offers to India recorded 2.5 years high with a surge by $10/t w-o-w.

Iron Ore & Pellets

• SteelMint’s bi-weekly domestic pellet index “PELLEX” has decreased by around INR 250/t to INR 11,550/t, DAP Raipur in the recent trades. However, limited trades were reported this week as buyers turned cautious in booking material at increased offers.
• SteelMint’s pellet export index (FOB east coast India) remained largely stable this week. Index stood at $136/t on 25th Nov’20. Indian pellet makers have not been offering material for exports since past few weeks, considering higher realizations in domestic market.
• OMC has scheduled an e-auction for around 1 mn t iron ore lumps on 2 Dec ’20. Major portion of material put to auction is from Gandhamardan mines followed by Koira and Daitari mines. Base prices have increased upto by INR 1,600/t against base price of last auction conducted in Oct ’20.
• SAIL has concluded an auction for 72,000 t iron ore fines (Fe 62.5%) from its Bolani mines in Odisha yesterday. The auction received bids at INR 5,540-5,550/t (loaded into rakes and excluding royalty), SteelMint learned from its sources. The bid price has increased by INR 1,140-1,150/t against base price at INR 4,400/t.

Coal

• Australian coking coal prices have been showing an upward movement following several recent transactions concluded at higher levels on FOB basis in ex-China markets.
• A 75,000 t cargo of an Australian premium mid-volatile coking coal was traded on Wednesday 25th Nov at $100/t FOB Australia with a late December laycan.
• Another trade was concluded yesterday at $101.50/t FOB Australia for 75,000 t of an Australian premium low-volatile cargo with an early January laycan.
• However, despite the recent strength observed in ex-China markets, some market participants still hold conservative views towards the near-term outlook on prices.
• Ex-Chinese buying interest for seaborne coking coal is presently limited across major markets in the Asia-Pacific region including India despite ample material availability at steeply discounted levels.
• Indian buyers are mostly refraining from immediate procurement in hopes that offers could decline further.
• Latest offers for the Premium HCC grade are assessed at around $101.25/t FOB Australia, $173.00/t CNF China and $114.65/t CNF India.

Ferrouss Scrap

• Imported scrap prices in India have climbed to 2.5 years high following the global rally. The global market seems strong as Turkey has continuously raised scrap prices in the recent deep-sea cargo bookings made. However, the Indian market remained less active as buyers are not aggressively booking cargoes and preferred domestic scrap over imported.
• Prices jumped on a combination of factors including the continuing shortage of material as well as logistical issues related to poor availability of containers and rapidly rising freight rates. SteelMint’s assessment for Shredded scrap in containers of UK/EU origin stands at $370/t CFR Nhava Sheva, rising significantly by $10/t against the end of last week.

Ferro Alloys

• Indian silico manganese prices remained relatively stable after increasing last two weeks on improvement in the steel market. Producers are holding their offers firm as exports have picked up.
• Indian ferro manganese prices increased marginally amidst strong steel market sentiments. Meanwhile, demand remained dull from exports.
• Indian ferro chrome prices reduced marginally from the previous week amidst a supply-demand mismatch. Currently, prices are hovering at around INR 66,000-66,500/t exw Jajpur.
• Indian ferro silicon prices increased sharply in line with international ferro silicon prices. Producers are also facing higher prices for carbon material and particularly Bhutan is facing labour issues leading to an increased cost of production.

Semi Finished

On a weekly basis, domestic sponge iron offers decline by INR 100-900/t, while billet prices fluctuate by INR 100-600/t across regions.

• SAIL is going to conduct an auction for 14,250 t basic grade pig iron from Bokaro Steel Plant, Jharkhand on 02 Dec ’20.
• SAIL Rourkela Steel Plant conducted an auction for 3,900 t steel grade pig iron on 27th Nov. Buyers booked entire quantity at a weighted price of INR 29,100/t exw.
• SAIL conducted an auction for 15,000 t prime steel grade pig iron on 23 Nov’20 from its Bhilai Steel Plant (BSP). The entire quantity was booked at a weighted price of INR 30,250/t exw.
• Vedanta Resources has concluded an auction for 1 rake (2,170 t) foundry grade pig iron for northern India at the bid price at around INR 30,400/t exw.
• TATA Metaliks has kept prices unchanged. Offers for basic grade pig iron is reported at INR 31,300/t & for foundry grade at INR 33,200/t exw Kharagpur, eastern India.
• RINL conducted a 4,000 t pooled iron auction on 23 Nov’20 .The auction received good participation as entire material booked at around INR 27,000/t ex-Vizag.
• Indian sponge iron export prices drop by $5/t (w-o-w) to $355/t CPT Benapole, equivalent to $370/t CFR Chittagong, Bangladesh. Total of 8,000-9,000 t deals reported to Bangladesh this week.
• About 15,000-20,000 t induction grade billet export deals reported to Nepal at $460-465/t exw Durgapur, equivalent to $485-490/t CPT Nepal. While, fresh offers increased to $465-470/t exw Durgapur, via road/rake delivery.
• Steel grade pig iron prices declined by INR 200-1,000/t with a major drop of INR 700-1,000/t in central & eastern regions on account of less demand as well improved supply with recently floated auctions by SAIL.

Finished Longs

India’s finish long steel market of mid-sized has seen a moderate response this week & offers decline by INR 200-500/t w-o-w in north, east and central region, while in the southern region the same fluctuated by INR 100-400/t. However, in the western region from the last couple of days improved demand and adequate flow of transactions led to increased the rebar prices up to INR 700/t.

• Trade reference rebar prices of 10-25 mm through mid-sized mills assessed at INR 37,000-37,200/t exw Raipur, INR 40,100- 40,400/t exw Jalna.
• Trade discount given by Raipur based heavy structure manufacturers stood at INR 400-700/t and the trade price of 200 Angle is at INR 41,000-41,400/t exw.
• Trade discounts in Raipur wire rod is currently at INR 500-700/t and trade reference prices stood at INR 38,300-38,600/t exw Raipur, INR 38,400-39,000 exw Durgapur, size 5.5 mm.
• APL Apollo Tubes Limited, has increased pipe price by INR 500/t to INR 48,000/t ($649) FoR in Chattisgarh w.e.f 25th Nov.

Finished Flats

Domestic HRC & CRC prices in India’s trade segment have increased by INR 500-1000/t w-o-w.SteelMint’s benchmark price assessment for HRC stood at INR 46,000-48,000/t (exy Mumbai) and CRC at INR 55,000-56,000/t (exy Mumbai). Prices do not include GST extra @18%

Reasons driving domestic flat steel prices are:

• Recently Indian steel mills have announced a second price hike in Nov’20 by INR 750/t and at the beginning of the month by INR 1,000-1,250/t.
• Traders are making a bulk purchase and are restocking heavily on bullish market trends and higher steel prices in upcoming months.
• In addition to this, the stockist of Faridabad (northern India) highlighted a shortage of HRC, primarily of the thinner gauge.
• If trade sources are to be believed, mills are likely to announce a price hike of around INR 1,000-2,000/t ($14-27) for Dec’20.

Reference Prices as on 28 Nov’20 (Week 48)
Prices are exw & exclusive of GST

Indian export reference prices as on 28 Nov’20

Prices in $/t

Source: SteelMint Research