Indian Steel Market Highlights, Week 48

During the Week-48 (20-26 Nov’17), Indian steel market observed multiple sentiments where in the semi finished offers increased by INR 300-800/MT marginally by medium and small scale producers, however the flat steel i.e. HRC & CRC offers fall by INR 500 (USD 7) & INR 1,000/MT (USD 16), W-o-W.

Raw Material: No revision was seen by Odisha based miners, however few miners have kept their sales closed. As per market sources report, EC renewal of Serajuddin Mines’ lease is due and it is to expire on 02 Dec’17. In the latest update received, the renewal for the same is still pending and this may result in fall in iron ore supply from the mine if the lease renewal takes considerable time.

NMDC, conducted auction for 56,000 MT iron ore yesterday from its Kirandul and Bacheli mines in Chhattisgarh for non-MoU customers. According to sources, the DR-CLO offered in the e-auction fetched a premium of around INR 580/MT & one rake of DR-CLO was bought by JSW Steel.

Central India (Raipur) based pellet manufacturers have raised offers following hike in pellet sponge (P-DRI) prices. Current offers for Fe 63% pellets are assessed at INR 5,500-5,600/MT (ex-Raipur). Last week the offers were hovering at INR 5,300-5,400/MT

Imported scrap offers to India have moved up this week by around USD 5/MT. Offers for Dubai HMS 1&2 is seen around USD 310/MT, CFR Nhava Sheva. Current offers for HMS from Australia is heard around USD 320/MT, CFR and that from west Africa is around USD 300/MT, CFR.

Shredded scrap offers from USA/UK are presently heard around USD 340/MT, CFR Nhava Sheva which were around USD 330-335/MT, CFR last week.

Coking Coal : Coking Coal prices are going up once again, after taking a U-turn, from the falling trend exhibited upto the end of Oct’17.

Demand for the coal has strengthened substantially as buyers in the major steel producing nations have become aggressive in importing the coal well in advance before the winter holidays to begin in Australia towards the later part of Dec’17 and the rainy season setting in that country by Dec’17 end.

There will be no production of the coal—hence, no supply—during the winter holidays, extending from 20Dec’17 to 8Jan’18, when the coal companies will be closed. Thereafter, the rainy season is likely to impact the supply of coal by flooding coal mines and railway lines, apart from raising the moisture content in the coal. Typically, Indian buyers do not prefer more than 10-12% moisture content in the coal.

At the same time, maintenance activities going on at various coal handling terminals in Australia are causing delays for coal cargo vessels at the ports. According to the latest vessel line-up reports, there are 44 coal vessels waiting in queue at DBCT, in which, maintenance activity is going on in the berth no 2, and that is expected to stretch at least upto 5 Dec’17. Moreover, the Port Kembla Coal Terminal is now closed for two weeks as a new ship loader is being installed.

Glencore has shut down one of its two Coking Coal mines, tightening supply.

These factors have resulted in abrupt price rise for the coal. Spot prices of the Premium HCC is assessed at around USD 202/MT FoB Australia.

Semi finished steel market showed improvement on weekly basis, domestic sponge & billet prices moved up by INR 400-600/MT owing to good demand & improved export inquiries.

– Sponge iron prices in India’s 2nd largest producing state hits 4 months high, sponge iron (P-DRI) is recorded at INR 18,000-18,200/MT (USD 279-282) ex-Raipur, While Chhattisgarh state government approved  rebate of 80 paise per unit on power tariff in the week.

– Vizag Steel concludes 30,000 MT billet export tender at around USD 450-452/MT, FoB India.

– JSW Steel allocates 10,000 MT Billet (130mm,5SP) for export, for December shipment at USD 450-455/MT FOB India, but JSW’s expectation ascertained at USD 460-465/MT FOB, as per sources.

– In context to exports, SteelMint’s pig iron export offers remain firm this week & price assessed at USD 325-345/MT FOB India.

Finish Long Steel : With the mixed sentiments, Finished steel offers fluctuated by INR 200-500/MT on weekly basis in Rebars & Wire rod offers. While Structure offers in Mumbai (Maharashtra region) rise upto INR 1,000/MT over increase inquiries.

Flat Steel Market : Major mills in India have kept the flat steel prices stable in the backdrop of bleak demand and slow movement of material in the domestic market.However prices in traders market witness marginal fluctuations over low sales.

This week, prices have again come down by INR 500/MT in traders market and currently trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed in the range of INR 39,000/MT (ex-Delhi), INR 39,000/MT (ex-Chennai) and INR 38,500-39,000/MT (ex-Mumbai). Trade reference prices (basic) for CRC (IS513) 0.9mm are assessed in the range of INR 44,000/MT (ex-Delhi),INR 43,000-44,000/MT (ex-Chennai) and INR 43,000/MT (ex-Mumbai).The prices mentioned above are basic prices excluding GST at 18%.

Indian mills actively booking cargoes to Vietnam-Indian manufacturers are offering HRC export offers to Vietnam in the range of USD 558-560/MT,CFR Vietnam for Dec shipments.However Bhushan steel’s HRC import offers were heard around USD 550-555/MT CFR basis.Thus Indian HRC export offers offers are assessed at USD 545/MT Fob India.

Indian Raw material and Finished Steel reference Prices as on 25 Nov (Week 48)

Prices are Ex-works, Exclusive of GST at 18%

Indian Export Reference Prices

Source: SteelMint Research