Indian Steel Market Overview, October 2017

In the month of October 2017, Indian steel market dipped owing to lack of domestic demand and also due to lower export orders.

During the month prices of Semis & Finished steel products fall approximately INR 600-1,200/MT (USD 9-18) & INR 700-1,400/MT (USD 10-22) across major Indian markets. Further, the flat steel offers were also corrected by INR 800-1,200/MT (USD 12-19).The price changes are on monthly average basis – Oct’17 Vs Sep’17

Iron Ore: In the month, Odisha based major merchant miners have rolled over Iron ore prices. Meanwhile, India’s largest iron ore producer – NMDC has cut prices up to 5% (INR 110) for Oct’17 deliveries.

– Iron ore dispatches from NMDC’s Chattisgarh mines fell in Oct’17 by about 30% (excluding Essar) as railway line connecting Andhra Pradesh has been damaged due to land slide. Manufacturers exploring import options.

– NMDC iron ore exports were up 50% M-o-M and have reported 24 rakes in Oct’17 compared to 16 rakes in Sept’17.

Pellets: Indian domestic pellet offers marginally decline by INR 100-300/MT due to slump in sponge prices.

– Indian pellet exports increased to 0.83 MnT in Oct’17 as compared to 0.82 MnT in Sept’17.

Coking Coal: Coking Coal prices were significantly down (fall by USD 20) owing to softening demand and increase availability. The demand for the coal lowered as China’s steel production cut (about 50%) to be implemented from mid-Nov’17 to mid-Mar’18, as part of the Chinese government’s effort to curb pollution. At the same time, domestic Coking Coal production in China has increased recently. This has resulted in lowering coking coal offers globally.

Semi Finished: Indian Sponge Iron & Billet domestic offers plunge by INR 600-1,200/MT (USD 9-18) due to weak demand on festive holiday’s mood in Indian markets.

Domestic Pig Iron offers also slumped by INR 1,000-1,700/MT (USD 15-26) following weak demand from both Indian domestic & global market on falling steel prices. Also, decline in global coking coal and scrap offers were the major factors behind price corrections in pig iron. In context to export price movement, SteelMint’s pig iron export price assessment fell by USD 25-35/MT M-o-M to USD 330-335/MT, FOB India

– Indian government owned steel maker – Vizag steel also known as RINL, has concluded a tender of 45,000 MT billets at a price level of USD 490-495/MT FOB for 90mm billet and USD 470-475/MT FOB for 150mm sized billet for November end shipment.

– Indian billet exports are expected to cross 2 MnT in CY 2017 against at 1.75 million tonnes in CY 2016 due rising demand from Nepal and South East Asian countries over absence of Chinese billets.

– India’s largest merchant steel grade pig iron manufacturer, Neelachal Ispat (NINL) has not floated domestic offer during Oct’17 as the company’s prime eye to complete previous bookings due to maintenance work in blast furnace. Although, in the month end MMTC on behalf of NINL has floated a export tender of 15,000 MT non-alloy Pig Iron for which bid is due on 08th Nov’17.

– According to JPC report, India’s pig iron production increased by 3.1% in Sept’17 to 0.776 MnT compared with Aug’17 & Sept’16.

Scrap: Domestic HMS scrap offers fall by INR 500-1,000/MT (USD 7-16) M-o-M & assessed in the range of INR 19,000-22,000/MT ex-works & excluding GST at 18%. Meanwhile, in the month-end Imported scrap offers rise by USD 5-10/MT owing to the strong demand as steel mills globally starts to re-stock material on coming winter season which usually slowdown supply.

There was a bulk Import shipment recorded in India’a west coast which carries about 33,000 MT of scrap, as per the Indian customs.

Long Steel: Indian medium & small scale re-rollers were reluctant to cut prices over poor sells due to festive holidays. During the month prices of rebar & structural steel down by INR 700-1,400/MT (USD 10-22 ) and the major price fall reported in South & West India by INR 1,000-1,400/MT (USD 15-22) following in Central & East India by INR 500-1,000/MT.

However, the large scale producers have increased rebar prices during start of Oct’17 by INR 1,000-1,200/MT (USD 15-19). Although, in the mid of the month the makers have cut prices nearly INR 500-700/MT (USD 8-10) due to slump in domestic steel prices and weak demand.

– Indian government imposed anti dumping duty for a period of five years on imports of Chinese wire rod (HS code 7213 & 7227).

– It was also noted that Indian government has brought three more steel products (High-carbon steel wire rod, galvanized pre-coated sheets and zinc-aluminium pre-coated) under quality control order as per the Ministry of steel.

– Indian rebar exports increase in Oct’17 and recorded at 10,200 MT against at 5,000 MT during Sept’17.

Flat Steel: Indian Flat steel market have remained stable in the initial days of the month owing to lean buying activity in the domestic market. Further the bearish market sentiments has pushed the traders to sell the material at lower prices compared to that of manufacturers price.

On M-o-M in Oct’17, Domestic flat steel prices plunged by INR 800-1,200/MT. Apart this, HRC (2.5 mm, IS 2062) export offers have also decline by USD 5-10/MT and assessed at USD 560/MT FoB India.

– In the month, Indian government has imposed a definitive anti-dumping duty on ‘Colour coated/pre-painted flat products of alloy or non-alloy steel’ originating in or exported from China and European Union for a period of five years

– Indian steel exports increased by 20.8 % during September compared to August 2017.

Monthly Average Prices – Oct’17 Vs Sep’17

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

Indian Export Reference Prices as on Oct’17

Prices in USD/MT
Source: SteelMint Research