Indian Steel Market Weekly Snapshot

Indian steel prices remain on rising mode during the Week 22 (28 May-2 Jun) amid active demand and short supply for Billets specifically in Central & Eastern India.

The participants in Eastern market reported supply crunch for billets in line with improved export demand from Nepal and surge in domestic inquiries. Meanwhile in Central region, power shortage in Raigarh has slowdown Billet supply in merchant market.

As per SteelMint assessment, the prices of Semis & Finished long steel products have increased by INR 200-1,100/MT (USD 3-16). However, the Flat steel prices remain unaltered in traders market.

Iron ore and Pellets: Odisha Mining Corporation (OMC) has scheduled its next iron ore lump e-auction on 05 Jun’18. Base prices of Gandhamardhan & Daitari ore remain close to bidding prices of the previous e-auction. One of the units of SAIL – Bhilai Steel Plant (BSP) is planning to purchase 50,000 MT of Iron ore from NMDC each month as per market sources. The company is also considering an option to increase production of iron ore from its own mines Rajhara, Dalli & Rowghat in Chhattisgarh.

NMDC Kumaraswamy has increased iron ore base prices by INR 50/MT in fines and around INR 100/MT in lumps prices in Karnataka E-auction.On 23rd May, NMDC Chhattisgarh increased prices by INR 100-170/MT.

Domestic pellet offers in India have increased sharply this week. A significant hike in offers was seen in eastern parts of the country. However in western India and central India pellet offers have remained unaltered. Durgapur based pellet makers have raised their offer by almost INR 700/MT in a week. Southern India (Bellary) based pellet makers have increased offers by INR 100/MT this week.

Scrap: Buying interest for containerised imported scrap likely to move up again within next 5-7 days in India. The market remained weak on concerns over arriving monsoons expecting for further price corrections. However, prices remained almost stable throughout the week at downward corrected levels amid fluctuating global scrap prices.

Price assessment in containers for Shredded from UK/Europe stood stable at USD 375-378/MT as few trades concluded at these levels while offers from USA assessed in the range of USD 380-385/MT, while South Africa and Dubai origin HMS 1&2 scrap assessed in the range of USD 365-373/MT on the CFR Nhava Sheva basis.

Market participants are likely to resume bookings shortly over lowering inventories and fewer bookings during the last couple of weeks.

Coking Coal: Seaborne coking coal spot prices have been on a bit of run recently, boosted by the prospects of end-user demand growth with the resumption of full-fledged construction activity in China—the world’s major importer of coking coal. Consequently, the country is witnessing the resurgence of a firmer and strong demand for steel making raw materials, iron ore and coking coal, spurred by firm steel consumption. In fact, Chinese steel output is forecast to remain upbeat in the coming months until the summer season. Moreover, supply disruption caused by logistical issues in Australia’s Queensland coal belt—one of the world’s major coal producing region — is pushing the fuel prices even further. Import offers for the premium low-vol HCC grade are assessed at around USD 188/MT FOB Australia, which amounts to USD 201.35 CFR India.

Semi Finished: Domestic Billet offers rise by INR 400-800/MT on weekly basis. Disruption of power supply by Jindal in Central region amid less productivity attributes the price rise in major markets. Inline Sponge iron offers rise by INR 200-800/MT W-o-W, except in southern region.

— Indian induction grade billet export offers to Nepal hovering at USD 555-560/MT ex-mill, Durgapur & USD 545-550/MT ex-mill Odisha, Eastern India.

— In recent, Vizag Steel concludes  billet export tender for Nepal at around USD 550/MT (ex-mill)

— Indian sponge iron export offers reduced by USD 10/MT W-o-W, price assessment for 80 FeM sponge lumps hovering at USD 345-350/MT CPT Benapole (dry land port of Bangladesh & India) and USD 365-370/MT CFR Chittagong, Bangladesh.

— Jindal Steel has reduced offers – Pooled iron at INR 28,300-28,500/MT & Granulated Pig iron (Panther shots) at INR 29,300-29,500/MT ex-plant, Odisha. The company also offer steel grade Pig iron from its Raigarh unit at INR 30,500/MT ex-plant.

— Recently, SAIL had scheduled an auction for sale of about 7,400 MT steel grade pig iron from its Rourkela plant and company was able to sell only 400 MT. The material have been sold at the base price of INR 29,400/MT, participants reported.

— MMTC- India’s largest and state owned trading house, has floated a fresh export tender of 40,000 MT non-alloy Pig Iron on behalf of NINL. The due date for submission of bids was 14:30 hrs on 06 Jun’18.

— Market participants are waiting for the upcoming NINL’s price circular for June 2018 deliveries. In last week the plant has reduced pig iron prices by INR 500/MT & offered Steel (N1) grade material at INR 30,000/MT & Foundry (N2) grade at INR 31,000/MT, ex-Cuttack, Odisha on 23rd May, which was valid till 28th May.

— SteelMint’s Pig iron export price assessment stood at USD 375-385/MT FoB India, USD 395-405/MT FoB Brazil and USD 380-390/MT FoB Black sea.

Finish Long Steel established with positive sentiments amid sufficient bookings were registered along with inappropriate inventories in rolling mills for specified regions holding the current price range till now and further backlog orders will get clear in coming week as per market sources.

Price range have been strengthen by around INR 200-1,100/MT as per commodities and currently rebar price assessed at INR 41,400-41,800/MT Ex- Jalna, INR 41,700-42,100/MT Ex- Raipur, INR 40,800-41,200/MT Ex-Chennai. All prices are basic & excluding GST.

— Rathi Steels based North region increase the price range by around INR 750/MT on week basis and currently offering at INR 45,800/MT, 12 mm, Ex-work, & excluding GST.

Flat Steel Market:  Few major Indian mills like SAIL & JSW Steel are heard to have announced price hike of INR 500/MT (USD 8) on 1st June’18 owing to higher production cost. Also lesser import bookings from Indian mills lead to surge in flat steel prices in domestic market.

Meanwhile major exporting nations like Japan and South Korea have limited allocations for exports over strong domestic demand. And imports from China are not viable at current levels. The market participants shared that limited HRC import bookings of around 20,000 MT from Indonesia were heard at levels of USD 650/MT, CFR for June shipment. Apart from this no significant import bookings were heard.

Also,Indian auto makers continue to show robust growth in sales volumes in May’18. In first two months of FY19 (Apr-Mar’18) company’s sales have increased by 19.9% Y-o-Y.Thus all these factors contributes in rising flat steel prices in domestic market.

However increased prices have not yet passed on to traders market.Thus currently trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm remain unchanged and are assessed at INR 45,500/MT (USD 674)  (ex-Mumbai),INR 45,750 – 46,000/MT (USD 678-681) (ex-Delhi),INR 46,000/MT (USD 681) (ex-Chennai).

Trade reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 51,000-51,500/MT (USD 756-763) (ex-Mumbai),INR 52,500/MT(USD 778) (ex-Delhi) and INR 51,500/MT (USD 763) (ex-Chennai).

Indian Raw material and Finished Steel reference Prices as on 2 June 2018 (Week 22)

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

Indian Export Reference Prices as on 2nd Jun’18

Prices in USD/MT
Source: SteelMint Research