Weekly: Indian steel market snapshot

India’s secondary steel market has noticed mixed sentiments during the 3rd week due to subdued demand.

As per the assessment, sponge iron offers fell sharply by INR 700-1,700/t & billet by INR 1,100-2,000/t across the markets. Also, rebar market has observed weak demand and limited buying inquiries in this week, resulting a selling pressure was noticed in the market and prices have dropped by INR 1,000-2,000/t w-o-w basis.

However in finished flat steel, few primary mills have announced a second hike up to INR 1,000-2,000/t on the severe shortage of material in the domestic market. However, market sentiments have turned bearish and prices have declined in trade segment.

Iron Ore and Pellets

• Odisha iron ore prices this week softened following price cut Essel mining and INR 300-400/t and lower bids received by the SAIL Bolani auction. Odisha’s Essel Mining has cut iron ore lump prices by INR 400/t and that of fines by around INR 300-400/t wef 16th Jan, credible sources reported to SteelMint. Notably, the miner has cut offers after a gap of eight months as its last price cut was seen in May’20.
• SAIL conducted an auction from its Bolani mines on 15th Jan for 136,000 iron ore fines (Fe 62.5%). Entire material put to auction received bids at INR 4,960-5,000/t (loaded into rakes and excluding royalty).
• In another auction from its Dalli & Rajhara mines on 13th Jan for 56,000 t, the auction received bids for 28,000 t iron ore fines (60.47%) from Rajhara mines at INR 4,220/t (loaded into rakes and including royalty).
• SteelMint’s bi-weekly domestic pellet index “PELLEX” moved down marginally by INR 50/t to INR 12,300/t DAP Raipur. Owing to falling P-DRI prices, buying interest is lower by INR 300-400/t from the current prevailing pellet offers in Raipur.
• SteelMint’s weekly pellet export index (FOB east coast India) has increased by $5/t w-o-w to $192/t. Kudremukh iron ore company Ltd (KIOCL) has concluded pellet (Fe 64%, less than 2% Al) export deals at around $208/dmt, FoB India. KIOCL’s pellet export prices have moved up by around $25/t against its last tender concluded in mid-Dec’20. In another confirmed trade heard, a trader has concluded pellet (Fe 63%, 3% Al) two export deals recently at $203-205/t CFR China for mid-Jan’21/early Feb laycan.

Coal

• The FoB spot price for Australian premium low-volatile (PLV) hard coking coal (HCC) surged by $10.5/t this week to a near three-month high with a sell tender concluded at a higher level.
• Firm bids were reported for this tender from $103/t to above $110/t FoB Australia, according to market sources.
• Earlier however, Australian PLV HCC FoB price held steady remained stable at $102/t due to a lack of spot trades in the Asian spot market outside China.
• Alongside limited spot demand from end-users in Europe, North Asia and India, Chinese traders continue looking for reselling opportunities, aggravating oversupply concerns of premium coking coal.
• Meanwhile, heavy rainfall in Australia’s coking coal hub of Queensland could affect mining operations or railway transport, while the recent resurgence of Covid-19 infections in China’s Hebei province might affect steel production.
• Latest offers for the Premium HCC grade are assessed at around $123.00/t FOB Australia, $214.50/t CNF China and $137.65/t CNF India.

Ferrous Scrap

• India imported scrap prices rose further but trades turn quiet on holidays as buyers are away from the market due to negative sentiments. Offers from yards containerized Shredded stands at $500-510/t, CFR Nhava Sheva levels.
• However, few traders have significantly lowered the scrap offers towards the second half of this week and were trying to push sales in the market in the anticipation that things may get worse in the coming days. Offers for containerised Shredded scrap through high-seas is being heard from traders at $490/t, CFR. Mills await some correction by late January as the market could pick up from next week.

Ferro Alloys

• Indian silico manganese prices remained stable amidst dull demand in the domestic market, while in exports, prices for 65-16 grade increased amidst shortage of the grade in the portside regions.
• Ferro manganese prices remained stable but high, due to moderate demand in the domestic market. Meanwhile, demand from exports also remained in the low to moderate scale.
• Ferro chrome prices escalated by INR 10,000/t in the week, due to increasing Chinese demand and prices in their domestic market. The producers are firm on their offers now and are expecting the prices to reach INR 1,00,000/t soon owing to strong domestic market .
• Indian ferro silicon prices remained stable due to low to moderate demand in the domestic market. However, increasing international prices and no imports have enhanced the sentiments of Indian producers to keep the prices high.

Semi Finished

On a weekly basis, domestic sponge iron offers fall sharply by INR 700-1,700/t & billet by INR 1,100-2,000/t across regions. In this period major fall in billet prices reported in Mandi Gobindgarh, northern India by INR 2,000/t, while sponge prices fell sharply in Durgapur, eastern India by INR 1,700/t.

• Induction grade billet export offers to Nepal drop by $20/t this week to $520-523/t exw Durgapur (equivalent to $545/t CPT Nepal) & few deals reported by suppliers.
• Indian sponge iron export prices fell by $20-25/t to $380/t CPT Benapole (equivalent to $395/t CFR Chittagong, Bangladesh). As per exporters, no major fresh deals this week as buyers assume further drop in offers along with declining imported scrap prices.
• Steel grade pig iron prices declined by INR 700-1,500/t due to falling billet & sponge iron prices amidst improved supply.
• SAIL has scheduled an auction for 10,700 t of prime steel grade pig iron on 20 Jan ’21 from its Bhilai Steel Plant, Chhattisgarh.
• SAIL conducted a pig iron auction from its Rourkela Steel Plant for 6,000 t material on 15 Jan’21 & the entire quantity was booked at INR 33,800/t exw.
• Bellary, Karnataka based BMM Ispat has lowered its sponge P-DRI offer by INR 900/t to INR 25,500/t exw.
• An Indian steel mill has recently concluded 16,000 t slab export tender for Feb’21 shipment t around $605-610/t FoB and the cargo is likely to be shipped to SE Asian nation.

Finished Long

India’s finish long steel market via induction route observed weak demand and limited buying inquiries in this week, which creates a pressure on rebar manufacturers, and in most of the major markets prices down by INR 1,000-2,000/t w-o-w basis. Along with lack of demand, reducing raw material cost are also a factor behind lowered long steel prices.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 42,600-43,000/t exw Raipur, INR 47,800-48,100/t exw Jalna.
• Trade discount given by Raipur based heavy structure manufacturers stood at INR 400-700/t and the trade reference price of 200 mm Angle is at INR 45,200-45,600/t exw.
• Trade discounts in Raipur wire rod are currently at INR 1,200-1,400/t and trade reference prices stood at INR 43,000-43,300/t exw Raipur, INR 44,000-44,200 exw Durgapur, size 5.5 mm.

Finished Flat

• Few major steel manufacturers have announced a second hike in flat steel prices by up to INR 1,000-2,000/t on the severe shortage of material in the domestic market. At the beginning of the month, mills announced a substantial increase in flat steel prices by around INR 2,000-5,000/t.
• SAIL is offering HRC at INR 55,500-55,800/t and CRC at INR 64,500-65,000/t.
• M/NS India is offering HRC at INR 56,500-56,900/t and CRC at INR 66,250-66,750/t.
• Indian mills are facing a supply crunch owing to robust demand from OEMs and the auto sector. Also, few mills are escalating HRC production to downstream industry.
• Major steel producing nations are offering HRC on higher side.Indian mills are offering HRC at $840-860/t CFR Antwerp.

Trade sentiments started to soften- Few trade participants shared with SteelMint that trade price corrected by INR 500-1000/t as the buying sentiments started to soften. Traders are reluctant to buy at higher prices. As per SteelMint’s benchmark price assessment, domestic HRC prices stand at INR 56,500-58,000/t and CRC prices at INR 68,000-69,000/t exy Mumbai.

Reference Prices as on 16 Jan’21 (Week 3)
Prices are exw & exclusive of GST

Indian export reference prices as on 16 Jan’21
Prices in $/t
Source: SteelMint Research