The Indian steel market has noticed a surge in prices during week 20, however, spot steel demand in the domestic segment remained moderate due to lockdown restrictions.
The prices across regions have spurt on the back of rally in raw material (Iron ore & Pellet) prices, which have surged by around INR 1,000-2,000/t this week. This led to a sharp surge in input cost of mills following which semis & finished long steel prices through the mid-size (secondary) steel plants rose sharply.
According to the assessment, the domestic billet prices have increased by INR 200-1,900/t across regions. Similarly, sponge iron offers have also inclined by INR 800-2,300/t.
Meanwhile, in the finished long market, the rebar prices have surged up to INR 1,500/t, w-o-w basis.
In context to finished flats, HRC & CRC prices are expected to remain high due to the surge in global steel demand on bullish trends and also high iron ore prices in the domestic market.
Iron Ore and Pellets
- SAIL conducted an auction on 13th May’21 from its Bolani mines in Odisha. 1,40,000 t iron ore dump fines (Fe 60%) were put up for auction today. Entire material put to auction received bids at INR 7,390/t (ex-mines, including Royalty, DMF, NMET and additional premium as per MMDR Act).
- Odisha’s Essel Mining has increased prices further by INR 1,600/t in lumps and INR 1,700/t in fines.
- Rungta mines has increased iron ore fines (Fe 62%) prices by INR 1,100/t recently, sources have reported SteelMint.
- Odisha’s state-owned miner, Odisha Mining Corporation (OMC), had scheduled an iron ore e-auction on 10 May’21 for 1.37 mn t of iron ore fines. The entire quantity put up for auction was booked with bids increasing by up to INR 2,750/t (over 50%) against the set base price. The miner had increased the base price by up to INR 1,880/t against the last e-auction held on 10 Mar’21.
- “PELLEX ” increased sharply to INR 17,300/t DAP Raipur.
- SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index has moved up by $12/t to $102/t FoB east coast India.
- SteelMint’s Indian pellet export index (Fe 64% 3% Al, FoB east coast) has recorded a sharp hike of $33/t w-o-w and stands at to $243/t on the improved demand from China post labour holidays.
Coal
Australian premium hard coking coal prices increased slightly this week with more bookings concluded in the premium low-volatile segment for June laycan. Conditions of uncertainty and a bearish demand outlook currently prevail in the Indian market for seaborne coking coal in view of the devastating spread of the Covid second wave. As a result, upside support for coking coal prices is limited, given that the worsening corona virus situation may impact the country’s supply chains by slowing port operations.
- Latest offers for the Premium HCC grade are assessed at around $114.00/t FOB Australia, $257.50/t CNF China and $145.20/t CNF India.
- South African RB2 portside prices this week recorded an increase of INR 500/t w-o-w basis and have been have been assessed at INR 7,600/t ex-Gangavaram.
- South African API4 index surged this week by $4/t and reached $104/t mark amid disruption in rail line connected to RBCT port and increased Chinese demand. Discounts for RB2 and RB3 were assessed at $15/t and $25/t respectively.
Ferrous Scrap
Imported scrap prices to India continued to rise but buyers were hesitant on bookings. The Covid outbreak in India has largely affected business and buyers are preferring domestic alternatives thanks to the increased imported offers. A hike in Turkish scrap prices has also supported scrap prices in South Asia.
- SteelMint’s assessment for containerized shredded scrap of UK/Europe-origin stands at $520-525/t CFR Nhava Sheva, rising by around $40/t w-o-w.
- Offers for Dubai-origin HMS 1 in containers are at $500-505/t CFR Nhava Sheva. Few deals of around 2,000t of UAE-origin HMS 1&2 and HMS (90:10) were reported by a Gujarat-based steel maker.
Ferro Alloys
- Indian silico manganese prices inched up amidst better demand from exports. Currently, prices are at around INR 88,000-88,500/t in Durgapur and INR 88,350/t in Raipur. Producers remain optimistic about the future pricing of silico manganese.
- Indian ferro manganese prices increased in Raipur, while remained stable in Durgapur. Currently, prices are at INR 86,500/t Exw in India. The prices in ferro manganese rallied after silico manganese increase.
- Indian ferro chrome prices went down further to INR 80,000/t Ex-Jajpur. Meanwhile, the market remains pessimistic, while buyers are waiting for upcoming Chinese tenders in anticipation of further fall.
- Indian ferro silicon prices rallied after supply scarcity was further intensified. Most producers are dealing at INR 118,000/t in Bhutan and INR 127,000/t Ex-Guwahati. Most of the Bhutanese producers are still catering to the previous orders and not offering any quantity in the spot market.
Semi Finished
Indian induction grade billet prices have increased by INR 200-1,900/t across region with a major increase of INR 1,300-1,900/t seen in Raipur, Jalna & Chennai. However prices in a few markets like Mandi Gobindgarh & Durgapur fall slightly by INR 300-500/t as buying inquiries slightly slowed down.
While in Central India offers remains supported on expected power cut in Raigarh, Pujipatra based plants through the Jindal Power. Similarly, sponge iron prices also inclined by INR 800-2,300/t.
- Tata Metaliks Ltd (TML) has raised its foundry-grade pig iron price by INR 1,600/t to INR 43,600/t ($595) and basic-grade (Si 1-1.5%) by INR 1,800/t to INR 41,300/t ($564) ex-plant, Kharagpur, Eastern India.
- SAIL has scheduled an auction for 2,500 t steel grade pig iron on 19 May ‘21 from its Durgapur Steel Plant-West Bengal.
- Vizag Steel has floated three export tenders for 60,000 t blooms (3SP/4SP) & the tender due date is 18 May ’21.
- SAIL conducted an auction from its Bhilai Steel Plant (BSP) for 12,650 t pig iron on 12 May ’21 & the entire quantity booked at a weighted average price of INR 39,550/t exw.
- Indian sponge iron export offers rally by $30-35/t this week & about 12,000 t deals confirmed on revised price at around $455/t CPT Benapole, equivalent to $470-475/t CFR Chittagong, Bangladesh. The prices surge on account of domestic gain on price rally of raw materials (Iron ore & Pellet).
- Steel grade pig iron prices surge by INR 1,000/t in Central region & about INR 2,000/t in North-East regions on active demand & healthy realization in exports, this has pushed manufacturers to keep prices strong as per market acceptance.
- Induction grade billet export offers mostly firm this week & reported at $590-595/t exw Durgapur (equivalent to $620/t CPT Nepal). Demand slightly improved as furnaces mostly shut down in Nepal due to rising Oxygen shortage.
Finished Long
India’s finish long steel via induction route in this week has witnessed an upward trend and rebar prices increased by INR 200-1,500/t w-o-w. Higher cost of heavy melting scrap and sponge iron prompted the long steel manufacturers to keep their prices high.
- Trade reference induction grade rebar steel prices of 10-25 mm size assessed at INR 47,400-47,800/t exw Raipur, INR 50,200-50,600/t exw Jalna.
- Trade discount given by Raipur based heavy structural steel manufacturers stands at INR 1,000-1,300/t and trade reference price of 200 mm angle is at INR 50,700-51,100/t exw Raipur.
- Trade discounts in Raipur wire rod stands at INR 1,800-2,000/t and trade reference prices stood at INR 47,500-47,700/t exw Raipur, INR 48,300-48,700/t exw Durgapur, size 5.5 mm.
Finished Flat
The continuing surge in global steel demand, high iron ore prices propelled mills to raise HRC CRC prices this month. Also the prices are likely to remain elevated on the back of the following factors:
- Major private steel mills booked around 20,000 t HRC for exports to Vietnam at $1070/t CFR basis and another mill booked 20kt HRC for exports to Vietnam at $1080/t CFR basis. New offers are heard to around $1100/t CFR Vietnam. Meanwhile another mill based in western India booked CRC for exports to Europe at $1400/t CFR basis.
- JSW Steel reported a capacity utilization of 91%, down 5% in Apr’21 as compared to 96% in Mar’21. The company’s crude steel production for Apr ’21 was at 1.37 mn t, down 5% month-on-month (m-o-m).
On the other hand, SteelMint’s benchmark prices for 2.5 mm thickness HRC stand at INR 66,000-67,000/t exy-Mumbai, down by around $600/t against last week.The prices mentioned do not include GST @18%.
Thus domestic steel prices are still at discounted levels as compared to global prices. Thus mills may further increase HRC and CRC prices next week. However elevated prices shall be absorbed in the domestic market or not remains a question due to the ongoing lockdown announced in many states of India.
Reference prices as on 15th May’21 (Week 20)
Prices are exw & exclusive of GST
Indian export reference prices as on 15th May’21 
Prices in $/t
Source: SteelMint Research
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