Weekly: Indian steel market snapshot

The Indian steel prices have observed an uptrend during week 16 on account of active trades & a slight drop in production levels seen in Central & Western India.

As per SteelMint’s assessment, Indian semi-finished steel prices (including sponge iron & billet) rose by INR 900-4,300/t across the regions. Also, rebar offers increased during this week by INR 1,100-4,000/t on account of active demand and a constant surge in raw material prices.

The prices surged sharply in the Western region – Maharashtra & Gujarat due to curtailed production by up to 50% on account of the supply shortage of oxygen as the government has ordered to divert oxygen supplies to curb COVID cases. This has also resulted in a sharp increase in prices in Central India i.e. Raipur.

Meanwhile, the finished flat steel market has seen a boost in prices & recorded an all-time high as major Indian steel mills announced a sharp price hike for Apr’21 deliveries on account of higher export realization and strong end-user demand.

Iron Ore and Pellet

• NMDC has announced a second price hike for Apr’21, SteelMint learned from credible sources. The price of DR CLO (Fe 67%) has been increased by INR 1,280/t, Baila lump by INR 1,100/t and that of fines by INR 500/t.
• KIOCL has concluded an export deal for pellets (Fe 63.5% and 2-2.1% Al) via a tender process. The deal was heard to be concluded at around $205/t FoB for a quantity of around 110,000t, sources have confirmed SteelMint.
• NMDC has increased base price for yesterday’s auction from Kumarswamy mines. Base price for fines has moved up by around INR 700/t and that for lumps picked up by about INR 800/t. The current floor price for fines (Fe 62.2%) stands at INR 4,411/t and that of lump (Fe 64.9%) is at INR 6,911 (basic, exclusive of Royalty, DMF & NMET).
• SteelMint’s bi-weekly domestic pellet index “PELLEX ” has increased sharply by INR 1,200/t to INR 14,700/t DAP Raipur in the recent deals.
• SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index fell marginally by $1 to $88/t FOB east coast India. Discounts for low-grade ore have widened to 30-35%.
• SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has moved up by $6/t w-o-w to $196/t in the recent deals.

Coal

Australian premium hard coking coal price continued decreasing this week as sellers lowered their offers to attract buying interest. Presently, the demand for both premium low-volatility (PLV) and premium mid-volatility (PMV) hard coking coal from Asia, except China, is limited but end-users may show more interest once prices are attractive.

• Latest offers for the Premium HCC grade are assessed at around $110.00/t FOB Australia, $222.00/t CNF China and $130.15/t CNF India.
• South African RB2 coal portside prices remained rangebound this week at Inr 6,600/t ex-Gangavram am amid limited trades and rising Covid fear.
• South African API4 index corrected by $3/t this week and stood at $92.5/t while discounts for RB2 stood at $15/t and for RB3 at $26/t.

Ferrous Scrap

Imported scrap offers to India have mostly remained stable against last week, however, trades have slightly picked up. Nevertheless, strict lockdown in different regions amid increasing COVID cases has kept trades limited. In addition to it, ongoing Ramadan month has slowed down the global scrap market.

Turkish mills need some more vessels for late- May shipments. Market participants are of the opinion that prices might rebound soon. Shredded offers remain mostly firm at $460-465/t CFR Nhava Sheva basis. UAE origin HMS1 is now offered at $440-445/t CFR Nhava Sheva basis

Ferro Alloys

• Silico manganese prices fall marginally as sellers look to liquidate stocks in the domestic market. Currently, prices are at INR 88,000-89,000/t Ex-Durgapur and INR 90,000-91,000/t Ex-Raipur, while few producers are also offering at higher levels.
• Ferro manganese prices increased marginally in Durgapur amidst bullish market sentiments, while remained stable in Raipur. Meanwhile, there are only a handful of ferromanganese producers active in the domestic market. Currently, prices are at INR 86,000/t Ex-Durgapur and INR 86,500/t Ex-Raipur.
• Indian ferro chrome prices fell to INR 90,000/t after Chinese spot prices fell. Meanwhile, buyers are insisting on lower prices and the smelters are having selling pressure as the exports demand has wearied off. Buyers are anticipating further fall in the market.
• Ferro silicon prices increased as producers are overbooked and have no selling pressure. Currently, prices are at INR 104,500/t Ex-Bhutan and INR 104,500/t Ex-Guwahati. The sudden increase can be mostly attributed to the increase in demand from the stainless steel industries and the supply issues from Bhutan due to the closure of borders amidst ongoing Indian elections.

Semi Finished

Indian Semi finished steel prices increase sharply as per SteelMint assessment, the domestic billet prices have increased by INR 1,200-4,300/t across region with a major increase of INR 4,100-4,300/t in Jalna, Mumbai & Ahmedabad. Sponge iron prices also inclined by INR 900-1,600/t.

The prices have rallied on account of disturbed productions in Central & Western regions due to supply shortage of oxygen.

• About 6,000-8,000 t Indian sponge iron export deals concluded this week at around $425/t, while the current offers hovering at $430/t CPT Benapole, equivalent to $445/t CFR Chittagong, Bangladesh.
• Steel grade pig iron prices fluctuated by INR 300-700/t (w-o-w) across regions due to subdued demand amidst lockdown in several states.
• Induction grade billet export offers rose this week by $20-25/t to $560-565/t exw Durgapur (equivalent to $590/t CPT Nepal). However, demand remains weak as buyers waiting for price corrections.
• Vizag Steel has floated an ocean sale export tender for 90,000 t blooms (150×150 mm, 3SP/4SP grade). The due date is 20 Apr ’21.
• SAIL has scheduled an auction on 22 Apr ’21 for 4,900 t steel grade pig iron (in 49 units) from its Rourkela Steel Plant, Odisha.
• An Indian steel mill has recently concluded an export tender for 16,000 t prime mild steel non-alloy concast slab for end-May shipment at $655-660/t FoB.
• Raipur (central India) based mill has concluded 10,000 t billet (130*130 mm) export deal for May shipment at $635/t CFR Manila

Finished Long

India’s finish long steel market via induction route, in this week has witnessed a sharp hike in rebar prices across the regions by INR 1,100-3,500/t w-o-w basis while in few specific markets of Western region prices increased over INR 4,000/t.

• Trade reference rebar steel prices of 10-25 mm through midsized mills assessed at INR 47,600-47,900/t exw Raipur, INR 52,600-53,000/t exw Jalna.
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 1,100-1,400/t and trade reference price of 200 mm angle is at INR 49,500-49,900/t exw Raipur.
• Trade discounts in Raipur wire rod stands around INR 1,000-1,200/t and trade reference prices stood at INR 46,800-47,000/t exw Raipur, INR 46,300-46,500/t exw Durgapur, size 5.5 mm.

Finished Flat

Indian HRC and CRC trade prices recorded an all-time high post announcement of a second price hike by major steel mills for Apr deliveries. SteelMint’s benchmark prices for 2.5 mm thickness HRC stands at INR 63,000-64,000/t and CRC at INR 74,000-76,000/t exy-Mumbai. The prices mentioned are basic and GST extra @18% is applicable.

Why do domestic steel prices touch an all-time high?

• Buoyant global rates to support domestic steel prices – SteelMint’s Indian HRC (SAE 1006) export index stands at $927/t FoB East-coast basis, up by $37/t w-o-w against $890/t FoB basis. Major steel mills are offering HRC export at $940-950/t CFR Vietnam for June deliveries, up by $20-25 against last weekend.
• Steel mills announced 2nd price hike in April- Major Indian steel manufacturers announced a second price hike by up to INR 1,000-2000/t in HRC and around INR 3000/t in CRC in Apr’21 following bullish trends in the global HRC market. Mills are offering HRC at INR 59,750-60,000/t (exy-Mumbai). Prices do not include GST extra @18%
• Healthy demand from white goods and auto sector – India being a sub-continent nation, the demand for AC and refrigerators are likely to drive the consumer durable sector in Q1 FY22. SteelMint learned from market sources that high input cost is likely to drive FMCD manufacturers to hike prices by 4-5% across products on April 21. Passenger vehicle sales in the domestic market more than doubled year on year last month, albeit on a low base, driven by pent-up demand and consumer preference for personal mobility since the outbreak of the Covid-19 pandemic.

Near term outlook- Going ahead, the price hike is likely to be absorbed as demand from export and the domestic market remains strong for steel. Also, the huge gap between the trade price and the market price has widened which will provide enough scope to major steel mills to increase prices.

Reference Prices as on 17th Apr’21 (Week 16)

Prices are exw & exclusive of GST

Indian export reference prices as on 17th Apr’21

Prices in $/t
Source: SteelMint Research