Indian Steel Market Highlights, Week 52

Indian steel market moved upwards in week-52 (18-24 Dec’17) on strong domestic & export demand and with rising raw material prices.

In the week prices of Semi-finish & Finish long steel increased about INR 1,000-2,000/MT (USD 15-31), while Flat steel prices increase marginally by INR 500/MT (8).

Raw Material: In the recent auction conducted by NMDC Chhattisgarh for 68,000 MT iron ore, few rakes of DR-CLO booked in the e-auction fetched a premium of around INR 760/MT against the base price.

Domestic pellet prices in eastern and central India have strengthened by upto INR 400/MT W-o-W following hike in iron ore prices.

Godawari Power & Ispat in central India is offering Fe 64/63% grade pellets at INR 6,800/MT (Ex- Raipur), up by INR 200/MT against last offers. These pellet price levels in eastern India were last seen in the beginning of Feb 2015.

Imported scrap offers to India climbed sharply this week, few offers for US origin Shredded scrap in Bulk cargoes heard at USD 395-400/MT, CFR Nhava Sheva for Feb’18 Shipment, following which offers for containerised Shredded pushed up at around USD 375-380/MT, CFR and Dubai origin HMS 1&2 (80:20) assessed at around USD 335-340/MT. As of now bookings are subdued and most of the buyers are preferring domestic scrap or shifting to DRI /Sponge for steel making.

Coal: Coking Coal prices maintained the sky-rocketing trend due to the twin impact of stronger demand and tighter supply. While, the availability became scarce due to the stoppage in the production as winter holidays in Australia began from 20 Dec’17, demand became stronger on account of the steel makers, especially from Japan and India – procuring vigorously to stock the coal during the holiday period. At the same time, congestion at the DBCT compounded to the woes of the importers of the coal. Export offers for the Premium HCC escalated to around USD 246/MT FoB Australia.

Semi finished: Prices rigorously rise on strong domestic & export demand. The price rise were in same proportion for both Sponge iron & Billet by INR 1,000-2,000/MT.

The private pig iron producers in Central region also increase prices by INR 1,000-1,250/MT although in east it surge near to INR 500/MT. The prices increase in line with significant surge in domestic billet & global coking coal prices. Also, supply shortage due to blast furnace maintenance by Neelachal Ispat (NINL) is an another major reason behind strengthening Indian pig iron prices.

– In the week 52, Indian semi finished steel (sponge iron (DRI), BIllet & Pig iron) prices have hit 40 month’s high. The same price range were last seen during Jul-Aug 2014.

– Following rise in domestic offers, Indian sponge iron export offers to Bangladesh also increase about USD 5/MT & stood at around USD 350-355/MT; CPT Benapole (land port of Bangladesh and India). However, no major trades have been reported for sponge exports.

– SAIL has floated two export tenders for 13,500 MT billet each from Haldia and Vizag port. The material shipping is scheduled by Feb-end 2018 & has received bids above at USD 510/MT, according to the market participants.

– Rashtriya Ispat Nigam Ltd (RINL) has concluded its 55,000 MT billet export tender at around USD 500/MT FOB India. Further, the company has floated an export tender of 8,256 MT Billets & 5,504 MT Wire rod coil to Nepal.

– SteelMint’s export price assessment for non-alloy steel grade pig iron is remain firm at USD 345-350/MT FOB India.

– Indian billet export prices assessment increased to USD 510-520/MT against last week at USD 500/MT FOB India.

Finish-Long Steel: Indian finish long prices noticed sharp hike influenced by rise in semi finished offers & strong demand globally. It is also observed that inventories levels with the manufacturers are limited and buying interest continue to remain strong with the stockiest end as well end user segment.

The price gap between the Large scale and medium scale players have shrunken. Market participants seems to be remain in positive direction and also expecting that trade activities to remain strong in near term.

The current offer prices for 12 mm rebar are assessed – at INR 34,800-35,000/MT Ex-Raipur, INR 33,500-33,700/MT Ex-Durgapur, INR 37,000/MT Ex- Delhi, INR 36,800-36,900/MT Ex-Mumbai and INR 36,200-36,500/MT Ex-Chennai.

– The medium steel plants in Raipur have increase rebar gauge parity by INR 200/MT for 8 & 32 mm. Also, it increased in Delhi in same amount for 8-10 mm.

– In the initial days of week, A purchase source based in Nepal reported SAIL’s Wire rod export offers at around USD 540/MT (ex-mill), Bhilai Steel plant, Central India. It is also heard that medium mills in Durgapur (East India) also sold Wire rod to Nepal at around USD 530-535/MT on ex-mill basis.

– The major steel producers like – SAIL, TATA & JSW Steel have further increased rebars offers this week with immediate effect by INR 1,500-2,000/MT (USD 23-31).

Flat Steel Market: This week Indian flat steel market witness the marginal hike of INR 500/MT in fewer regions amid active buying in domestic market. Also, major Indian mills are planning for another increase in domestic flat steel prices by about INR 1,000-1,500/MT (USD 16-23) in Jan’18 owing to surge in raw material cost along with spurt in global flat steel prices.

Presently trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed in the range of INR 39,600 40,000/MT (ex-Mumbai) and INR 40,000-41,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST @ 18%.

As per SteelMint assessment current reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 43,500-44,000/MT (ex-Mumbai) and INR 44,000-45,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST @ 18%.

Indian plate prices (IS2062 5-10 mm) also registered the hike by INR 500/MT and are heard in the range of INR 39,000-39,500/MT (ex-Mumbai) and INR 40,000/MT (ex-Delhi).

Bookings for the new material in domestic market have already started in the increased prices and Indian steel mills also have positive outlook for the bookings that shall be made in the month of Jan’18.

Indian Raw material and Finished Steel reference Prices as on 23 Dec (Week 52)

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

Indian Export Reference Prices

Source: SteelMint Research