Indian spot steel prices continued to move up on Monday primarily driven by three factors, first – the rising Chinese futures, second – the Covid cases gradually coming down and states relaxing the restrictions and third – the fact that large steel mills are likely to take another price hike for June deliveries.
SteelMint’s daily billet index increased by INR 750/t to close at INR 41,650/t ($574) on Monday (18:00 hrs IST).
In another trade, an auction of 10,600 t pig iron from SAIL’s Bhilai Steel Plant was reported to have been booked at INR 37,900/t (down by INR 1,650/t from the last auction price) on an ex-works basis. This could be an indication that the cost of production is still quite high and margins are thin. We are likely to witness this balancing act where the market expects raw material prices to normalise in coming weeks while steel prices continue to stand firm or increase marginally.
Chinese steel futures: Futures dropped today amid hopes that the production restrictions in Tangshan will be eased and domestic supplies will increase. However, fundamentals are strong and demand likely to remain strong in near future.
- Rebar, SHFE, Oct’21 = RMB 4,952 (-RMB 75)
- HRC, SHFE, Oct’21 = RMB 5,251 (-RMB 103)
- Iron Ore, DCE, Sep’21 = RMB 1,148 (+RMB 34)
Prices as on 8:23 IST, 1st June
Key events to look out for
- OMC (Odisha Mining Corporation) planned for an auction of 619,000t lumps, which is scheduled on 02 June.
- NMDC’s price revision.
- Large mills price announcement for June deliveries.
- European Union is likely to announce quota for HRC imports this week.
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