Indian steel market corrected in the month of May owing to low demand in domestic market and low export orders with Indian mills.
Long steel prices corrected in the range of INR 1,500-3,500/MT (USD 23-55), where large mills provided rebate of approx INR 1,000/MT, while medium and small players cut their prices by INR 3,500/MT.
Flat steel prices also corrected in the range of INR 1,000-2,000/MT (USD 15-30).
Key Highlights
1. Iron ore: Merchant miners in Odisha, India’s largest iron ore producing state, cut their prices by INR 100-300/MT in early May. State owned and India’s largest iron ore miner NMDC, had rolled over its prices for May despite low off-take.
2. Indian Pellet exports picked up in second half of the month. Few deals were reported which supported pellet prices in domestic market.
3. Coking coal: Prices slump by about USD 45/MT to USD 155/MT CFR India. On clear indications of moderate demand and ample supply, Coking Coal prices are expected to drift further down and are likely to stabilize at around USD 150-155/MT CNF India.
4. Billets: Domestic billet prices fell by INR 2,000-2,900/MT (USD 30-44) in major markets for two major reasons. One – Low export realization and weak demand in finished steel in domestic market. No major export deals were reported except 10,000 MT by Vizag steel, which was sold at USD 400/MT FOB India
5. Imported scrap: Around 8-10 bulk scrap vessels were booked in the month of May for which June and July delivery. At the same time containerized scrap trade has reduced substantially owing to higher container freight cost.
6. Pig Iron: Prices also corrected in domestic market owing to falling export demand and low scrap prices. India’s largest steel grade pig iron manufacturer NINL, had cut prices by INR 1400/MT twice in May. MMTC on behalf of NINL had floated two export tenders in the month, which was cancelled due to low price bids.
7. HRC: Indian HRC export offers also fell in the month of May in order to match Chinese prices. Last offers for HRC was reported at USD 460-465/MT FOB India main port. No major export deals were reported in the month of March
Impact of GST (Goods and service Tax): Indian government is introducing GST in the month of July’17. This has resulted traders and stockiest to de-stock their inventories.
Monthly Average Prices – May’17 Vs Apr’17
| Products | Markets | Taxes | Prices in INR/MT | M-o-M | |
| May’17 | Apr’17 | ||||
| Pellet Fe 63%, 6-20 mm | Ex-Barbil | ED 12.5%, VAT/CST Extra | 3,940 | 4,770 | -830 |
| Iron ore Fe 62%, 5-18 mm | Joda loaded to wagon | Incld Royalty, DMF & NMET | 3,710 | 3,950 | -240 |
| Coking Coal, Premium HCC | CNF India | Prices in USD | 187 | 232 | -45 |
| Scrap HMS (80:20) | Ex-Mumbai | ED 12.5%, VAT/CST Extra | 21,100 | 21,900 | -800 |
| Sponge Iron (C-DRI) 80 FeM | Ex-Raipur | ED 12.5%, VAT/CST Extra | 16,300 | 17,900 | -1,600 |
| Pellet sponge (P-DRI) 80 FeM | Ex-Raipur | ED 12.5%, VAT/CST Extra | 14,800 | 16,700 | -1,900 |
| Pig iron Steel grade | Ex-Raipur | ED 12.5%, VAT/CST Extra | 24,100 | 24,700 | -600 |
| Billet 125*125 MM | Ex-Mumbai | ED 12.5%, VAT/CST Extra | 26,900 | 29,300 | -2,400 |
| Rebar (12mm) | Ex-Mumbai( Medium Scale) | ED 12.5%, VAT/CST Extra | 31,100 | 32,800 | -1,700 |
| Ex-Mumbai( Large Scale) | ED 12.5%, VAT/CST Extra | 35,600 | 35,600 | 0 | |
| HRC (2.5-8 mm) | Ex-Mumbai | Incld ED 12.5%, VAT/CST Extra | 39,700 | 41,400 | -1,700 |
| CRC(0.90mm) | Ex-Mumbai | Incld ED 12.5%, VAT/CST Extra | 46,300 | 47,600 | -1,300 |
| HR Plate(5-10mm) | Ex-Mumbai | Incld ED 12.5%, VAT/CST Extra | 39,100 | 41,300 | -2,200 |
| Wire Rod (5.5 mm) | Ex-Raipur | ED 12.5%, VAT/CST Extra | 29,500 | 32,200 | -2,700 |
| Structure ( 40 Angle) | Ex-Mumbai | ED 12.5%, VAT/CST Extra | 31,400 | 33,400 | -2,000 |
Basic prices in INR/MT
Source: SteelMint Research
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