Indian Steel Market Overview, December 2017

Indian Steel prices witnessed a significant rise during the month of December primarily owing to spurt in key raw material cost and improved global demand.

Sources revealed to SteelMint that inquiries from global buyers, specifically for Semi finished and Long products, remained strong throughout the month. Indian steel makers have successfully booked a number of orders for which dispatches are still in the pipeline.

During the month prices of Semis & Finished long steel products surged approximately by INR 1,500-4,000/MT (USD 23-63) and INR 3,000-4,000/MT (USD 47-63) respectively in major Indian markets. Further, Flat steel offers also rose by INR 800-1,000/MT (USD 12-16). The price changes are on monthly average basis – Nov’17 Vs Dec’17

Iron Ore: In Dec’17, India’s largest iron ore producer – NMDC increased iron ore price by INR 200-300/MT for Dec’17 deliveries and floor price for Dec’17 Karnataka e-auctions by INR 200-300/MT.

Odisha based major merchant miners also raised lump prices by INR 800/MT and fines prices by INR 400/MT on monthly basis during Dec’17.

— India’s largest iron ore miner, NMDC supplied 307 rakes of iron ore from Chhattisgarh based mines in Dec’17, an increase of 50% as against supply of 204 rakes in Nov’17.

— RINL increased sourcing from NMDC Bailadila mines by 57% in Dec’17 to 132 rakes in Dec’17 as compared to 84 rakes in Nov’17. JSW Steel, Dolvi doubled iron ore procurement from NMDC in Dec’17 to 20 rakes in Dec’17 from 9 rakes in Nov’17.

— Closure of some large Iron ore mines in Odisha – 5 working iron ore mines in Odisha have gone out of operations as they failed to pay out the penalties by 31st Dec’17, as per deadline was given by honorable Supreme Court. The closed mines produce 20 MnT iron ore annually.

Pellets: Domestic pellet offers in India have increased by INR 500-700/MT on monthly average basis. Significant hike in offers were seen from eastern and central parts of the country.

In the mid Dec’17, an east India based pellet manufacturer, concluded a deal for 50,000 MT to China at around USD 116-117/MT, CFR China.

Scrap: No major bookings for imported scrap have been seen during the month by Indian buyers as smelters largely preferred domestic scrap. The domestic scrap offers were increased in the range of INR 1,000-1,800/MT (USD 16-28) on monthly average basis.

Imported ferrous scrap offers also increased in Dec’17, on monthly average offers for HMS 1&2 reported at USD 330/MT against USD 307/MT in Nov’17 of Middle East origin, CFR Nhava Sheva. In line average offers for Shredded scrap from Europe also gained by USD 22-25/MT to USD 360/MT(Monthly avg.) on CFR basis in Dec’17.

Coking Coal: Coal offers have remained strong in the month and have reported a rise of USD 38-40/MT on monthly average basis. The current offers for Premium HCC, Australian coal are around USD 275./MT, CNF India.

— Coal India Ltd (CIL) has reported an increase of 7% Coal production that stood at 54.63 MnT in Dec’17 against 51.29 MnT in Nov’17.

— SCCL has reported coal production of 5.68 MnT in Dec’17, rising by 27% M-o-M compared with 4.49 MnT in Nov’17.

Semi Finished: Domestic billet and sponge offers continue to surge following good demand amid higher raw material prices. As per the assessment it was noticed that, semi finished steel (Sponge iron, Billet & Pig iron) prices have hit a 40 month high in Dec’17. The same price range were last seen during Jul-Aug 2014. While on Monthly average basis, domestic billet offers rose in the range of INR 2,000-4,000/MT (USD 32-63) and Sponge by INR 1,400-2,400/MT (USD 22-38).

— Indian sponge iron export offers to Bangladesh have increased to USD 375-380/MT CPT Benapole (land port of Bangladesh and India). And billet export offers increase to USD 540-550/MT FoB India.

— In Dec’17, JSW Steel raised its gas based DRI (Sponge iron) prices couple of times by around INR 1,500/MT. The offers, according to sources, were reported at around INR 20,000-20,500/MT, ex-Dolvi, Maharashtra.

— In the initial week of Dec’17, Vizag Steel had issued a tender for export of 15,000 MT billet (90*90mm) for delivery scheduled by Dec-end and the tender was concluded at USD 465/MT, FoB India. While, in the mid of month, the plant 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 and 5,504 MT Wire rod coil to Nepal which currently is under negotiation.

— 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 and has received bids above at USD 515/MT. Meanwhile, the company has cancelled it, according to market participants.

Indian private Pig iron manufacturers have increase prices by INR 500-1,500/MT (USD 8-24) on monthly average basis in Dec’17.

— A major Indian pig iron exporter has concluded export tender for 6,000 MT for non-alloy pig iron in Dec’17 at around USD 355-360/MT, FoB India. This is higher against our last price assessment made at USD 345-350/MT, FoB India.

— There were healthy inquiries from global buyers for Indian made pig iron during Dec’17. However, the Indian private pig iron producers didn’t take interest for exports due to better margins on domestic trades. SteelMint’s Indian export price assessment for basic grade pig iron in Dec-end stood at USD 350-360/MT FoB and domestic offers are assessed at INR 25,000-27,000/MT (USD 390-420), ex-works, East and West India.

Long Steel: As per the assessment, India’s large producers like SAIL, TATA , RINL, JSPL and JSW Steels have increased rebar offers thrice in Dec’17. In the beginning of the month, rebar prices increased by INR 500-1,000/MT. Similar price hike were observed in the mid of month. Producers once again raised prices by INR 1,000-2,000/MT towards the end of the month. Thus, the total price rise by large producers were in the range of INR 3,500-4,000/MT (USD 55-63).

— On monthly average basis in Dec’17, price rise by medium mills are assessed for Rebars by INR 3,000-4,500/MT, Wire rod by INR 3,700-4,700/MT and Structure upto INR 3,000/MT.

— Large producers continued to export good quantities of long steel products in Dec’17. According to market participants during the month the producers have concluded rebar export deals in the range of USD 570-590/MT on FoB basis.

— According to vessel line up data maintained by SteelMint, Indian rebar exports increased two folds in Dec’17 to 91,685 MT compared to 39,270 MT in Nov’17. Further, on yearly basis it increased by about 70% to 800,000 MT against at 480,000 MT in 2016.

Flat Steel: Indian mills have sharply increased Flat steel prices for December deliveries on account of higher raw material cost. Rise in domestic iron ore prices and imported coking coal offers has resulted in a hike in domestic flat steel prices. Also, there was improvement in domestic inquiries.

On monthly average basis in Dec’ 17, Domestic flat steel prices surged by INR 800-1,000/MT. Apart from this, HRC export offers have also recorded significant growth of USD 30/MT and stood at USD 575/MT FoB India.

— Tata Steel indicated its plans for expansion of Kalinganagar plant by 5 MnT. The company’s board has approved the implementation of second phase of Kalinganagar project under which its capacity will increase from existing 3 MnT to a total of 8 Mnt respectively in next four years.

Monthly Average Prices – Dec’17 Vs Nov’17

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

Indian Export Reference Prices as on 5th Jan’18

Prices in USD/MT
Source: SteelMint Research