Weekly: Indian steel market snapshot

India’s secondary steel market has noticed an uptrend in prices during the 1st week of 2021.

According to SteelMint’s assessment, this week sponge iron offers increased by INR 200-800/t, however a slight drop in prices of INR 200-300/t was seen in Durgapur, eastern India. Billet offers also rose by INR 500-1,800/t across markets with a major hike in Ahmedabad by INR 1,800/t. In rebar, prices of induction grade have moved up by INR 700-1,700/t w-o-w basis, whereas, northern India increased over INR 2,500/t due to higher raw material prices.

In flat steel, mills are likely to raise HRC prices by around INR 5,000/t in Jan’21 due to supply constraints.

Iron ore and Pellet

• OMC has scheduled the next iron ore fines e-auction for 851,100 t on 7th Jan’21.
• NMDC conducted two iron ore auctions on 30 Dec’20 for around 100,800 t from its Bacheli mines and 25,200 t from its Kirandul mines, Chhattisgarh. Offered material comprised 71,400 t fines, 16,800 t ROM, 29,400 t DR CLO and 8,400 t lump. Bids for DR CLO increased sharply by around INR 3,700/t and fines by INR 200/t above the set base price, sources reported SteelMint.
• SteelMint’s bi-weekly domestic pellet index “PELLEX” stands at INR 12,200/t DAP Raipur, marginally up by INR 50/t.
• SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index increased by $3.5/t this week and stands at $91.5/t FoB east coast India.
• SteelMint’s weekly pellet export index (FOB east coast India) stands at $181/t, up by $4/t w-o-w.

Coal

The FoB price for Australian premium low-volatile (PLV) hard coking coal (HCC) remained range bound this week amid moderate year-end demand.

• The seaborne spot market continued to witness transactions for non-Australian coking coals concluded at higher price levels to Chinese end-users.
• However, trading activities in the ex-China FoB market have considerably slowed down following the conclusion of a series of transactions in the past couple of weeks.
• India-delivered premium hard coking coal price for Australian-originated material is anticipated to remain relatively weaker than US coking coals. Indian buying interest for seaborne coking coal is presently limited despite ample material availability at competitive price levels.
• Latest offers for the Premium HCC grade are assessed at around $102.50/t FOB Australia, $202/t CNF China and $114.55/t CNF India.

Ferrous Scrap

• India’s imported scrap market has slowed down this week. Global scrap market insiders kept themselves away from the market on this weekend’s new-year holidays. In India, there is no buying at the moment as there is sufficient inventory with the steel mills.
• Indian buyers are awaiting fresh offers to be quoted by global suppliers which are likely to be out by mid-next week. The scrap market is also eagerly waiting for China’s scrap imports to understand the clear price direction.
• One confirmed trade was reported this week for 2,500 t of MS Shredded at $465/t CFR Vizag from Australia and New Zealand. SteelMint’s assessment for Shredded scrap in containers of UK/EU origin stands at $478/t CFR Nhava Sheva, moving up by $18 w-o-w.

Ferro Alloys

• Indian silico manganese prices remained stable as purchases took a backseat due to end of the year lull. However, due to increasing manganese ore prices, producers are firm on their offer levels and are resisting any further corrections.
• Ferro manganese prices increased by up to INR 2,000/t due to increasing ore prices and low supply in the domestic market. Meanwhile, the bullish sentiments are also supporting the increasing prices of ferro manganese.
• Ferro chrome prices increased by INR 3,000/t after Chinese ferro chrome purchase tender prices by their Stainless steel mills were increased. Since most of the producers were low on the chrome ore inventory, the production levels of ferro chrome decreased and the supplies were adversely affected it provided an added cushion on the increasing prices.
• Indian ferro silicon producers have escalated their offers by 15% ex-plant w-o-w amidst supply crisis in the domestic market. Meanwhile, Bhutanese producers are offering ferrosilicon at INR 1,10,000/t exw.

Semi Finished

On a weekly basis, domestic sponge iron offers inclined by INR 200-800/t except in Durgapur region where prices fall by INR 200-300/t & in context to billet, offers rise by INR 500-1,800/t across regions. In this period major rise in billet prices reported in Ahmedabad by INR 1,800/t.

• Indian sponge iron export demand remains active & prices stable this week with fresh deals of around 5,000 t, at $400-405/t CPT Benapole (equivalent to $415-420/t CFR Chittagong, Bangladesh).
• Steel grade pig iron prices surged by INR 500-2,000/t, in which a major hike was recorded in central India by INR 1,500-2,000/t, followed by INR 500-1,000/t in eastern & northern regions. Supply constraints along with strengthening scrap & billet prices globally, has resulted in a sharp surge in pig iron prices.
• Tata Metaliks Ltd has raised pig iron prices by INR 2,100/t to INR 39,900/t ($545) in foundry grade & for low silicon (1-1.5%) pig iron by INR 1,500/t to INR 36,500/t ($500) exw, Kharagpur, eastern India, effective from 1st Jan’21.
• An eastern India based pig iron producer reported to have sold 30,000 t pig iron at around $505/t FOB India east coast for end Jan/early Feb shipment.
• SAIL’s pig iron auction for 8,000 t (steel grade), conducted on 30 Dec’20 from Bhilai Steel Plant (BSP) was booked at INR 35,300 /t exw.
• Vizag Steel has floated an export tender for 50,000 t blooms and 20,000 t billets for mid of Feb ’20 shipments. The tender due date is 04 Jan ’20.
• Vedanta Limited, has increased its offer for foundry grade pig iron by INR 2,200/t to INR 42,700/t DAP Gujarat, effective from today (30 Dec ’20),

Finished Long

India’s finish long steel prices via induction route continue on rising trend in this week as well, and in most of the major markets rebar prices move up by INR 700-1,700/t w-o-w basis, while in few specified location of northern region prices increases over INR 2,500/t owing to strengthening in raw material prices along with active demand majorly from project segment.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 44,100-44,300/t exw Raipur, INR 48,800-49,100/t exw Jalna.
• Trade discount given by Raipur based heavy structure manufacturers stood at INR 700-1,000/t and the trade reference price of 200 mm Angle is at INR 46,900-47,300/t exw.
• Trade discounts in Raipur wire rod are currently at INR 500-700/t and trade reference prices stood at INR 45,500-45,700/t exw Raipur, INR 46,000-46,200 exw Durgapur, size 5.5 mm.

Finished Flat

• Indian steelmakers are eyeing a substantial hike in domestic flat steel prices for Jan’21 deliveries. Tight supplies and robust demand in the domestic market are the factors that may result in a hike in steel prices. It can be recalled that in Dec, mills announced four price hikes of around INR 6500-7000/t
• AM/NS India increases HRC and CRC upto INR 1,000/t ($14).The revised list prices stands at around INR 54,700-54,800/t for HRC and INR 64,700-64,900/t for CRC exy Mumbai.
• Tata Steel India has today raised HRC prices by INR 5,000/t and CRC by INR 6,000/t. Effective prices of HRC stand at INR 56,000/t and CRC by INR 67,000/t exy Mumbai

Reasons driving steel prices:

• Demand from OEM’s has increased by around 20-25% and this inflated demand resulted in the shortage in the trade market.
• Secondly major steel mills have made their export bookings for Feb’21 shipments. Increased export offers prompted mills to raise domestic prices.
• Robust demand from the auto and consumer durable sector continues to push domestic flat steel prices.

Prices in the trade segment- As per SteelMint’s benchmark price assessment, domestic HRC prices stood at INR 54,500-56,000/t and CRC prices at INR 64,500-65,000/t exy Mumbai. The prices mentioned are basic and GST @18% is applicable.

Reference Prices as on 2 Jan’21 (Week 1)
Prices are exw & exclusive of GST

Indian export reference prices as on 2 Jan’21

Prices in $/t
Source: SteelMint Research