Indian Steel Market Weekly Snapshot

During the Week-35 (27 Aug-1 Sep) of 2018, Indian domestic trade activities were subdued on average supply movements. The mid size mills reported mixed response from the local buyers over uncertainty in the market.

Meanwhile the large scale manufacturers indicated rise in Finished steel prices of September deliveries due to high input cost, expensive imports on devaluation in Indian rupee against US dollar, improved demand and less inventories in long steel.

As per SteelMint’s assessment, in these days prices of Semis products (Billet & Sponge iron) & Finished Long steel by medium mills have fluctuated by INR 200-1,000/MT (USD 3-15). In context to Flat steel the suppliers have maintained offers in line with average trade activities.

Iron Ore : Odisha’s based major merchant miners – KJS Ahluwalia, Kaypee Enterprises, Serajuddin and RP Sao Mines have announced a further hike in iron ore prices by around INR 300-400/MT in both lumps and fines. This is 2nd price hike made by them in a week’s time. Shortage of raw material amid monsoon and decent bookings of pellet exports along with logistic issues in eastern India have collectively pushed up iron ore prices.

Indian pellet offers in the domestic market have increased relentlessly from INR 300-900/MT W-o-W. Most of the pellet makers have booked decent quantities in exports amid lucrative offers in the global market. As per market participants report to SteelMint they are still not offering in the domestic market which has led to the shortage of pellets. Central India (Ex-Raipur) pellet offers have increased further significantly. Assessment for this week is at INR 8,500/MT against last week’s assessment of INR 8,200/MT (basic). Southern India (Bellary) based pellet makers have increased prices to INR 7,800-8,000/MT this week against last week assessment which was INR 6,900/MT.

According to market sources report to SteelMint, Godawari Power & Ispat Ltd.(Central India) has recently concluded an export deal of 50,000 MT pellet to China at around USD 152/MT, CFR China for November shipment.

Indian imported ferrous scrap prices climb up this week by USD 10-12/MT following global upturn and tight availability. Scrap importers have observed positive sentiments in last two weeks’ time on sharp rise in domestic scrap and sponge prices in all major regions. However, recent depreciation of Indian Rupee against USD to 71 levels could result in turning scrap imports too expensive again.

Offers for containerized Shredded from UK/Europe and USA suppliers are being quoted at USD 350-360/MT, CFR Nhava Sheva. Few trades for HMS 1 from Dubai and South Africa sold at USD 345-350/MT, CFR. While price assessment for HMS 1&2 (80:20) stands at USD 330-340/MT from UAE, UK and other origins depending on quality.

Coking coal: Seaborne coking coal prices softened marginally over the past two weeks amid thin trading, though higher coke prices kept sentiment positive among Chinese end-users. Moreover, the Chinese Yuan has slightly appreciated against the US dollar.Furthermore, healthy steel margins have improved overall coking coal demand from Chinese steelmakers. Nevertheless, port queues and import restrictions continue to hinder buying interest in the China market. Latest prices for the Premium HCC grade are assessed at around USD 183/MT FOB Australia and USD 197.70/MT CNF India.

Semi finished: Indian Sponge & Billet market observed volatility in prices by INR 300-900/MT on weekly basis, due to fluctuating demand amid supply constraints over rising raw material prices.

As per producers in East region demand was on average mode from domestic market, however this week production hampered over Power cut by DVC in Industrial of Durgapur.

— The latest export deals for the induction route billet from Eastern region, Durgapur reported at around USD 515-518/MT as against last offers at USD 520-522/MT ex-mill. On CFR basis the latest deal would charge at around USD 540-545/MT CFR Raxaul border (Nepal).

— Indian sponge iron export offers increased by USD 5/MT W-o-W, Participants reported small parcels of sponge iron sold out to Bangladesh; price assessment for 80 FeM sponge lumps are at USD 365-370/MT CPT Benapole (dry land port of Bangladesh & India) and USD 385-390/MT CFR Chittagong, Bangladesh.

— Jindal Steel closed its pig iron sales as captive consumption high and also due to healthy bookings in the previous offers of Steel grade at INR 30,000/MT (ex-Raigarh) & Granulated Pig iron (panther shots) at INR 28,500/MT (ex-Odisha) – Sources.

— SteelMint’s Pig iron export price assessment stood at USD 375-380/MT FOB Brazil, USD 375-380/MT FOB Black Sea & USD 380-390/MT FOB India.

— MMTC on behalf of NINL had floated an export tender of 30,000 MT non-alloy Pig Iron whose due date for bid submission was on 28 Aug’18. The tender fetched participation from two companies and the highest bid received was around USD 385/MT, FoB India.

Indian Finish Long market registered positive sentiments over hike in raw material prices since beginning of week but market sentiments urge trade participants to adjust price level as per buying inquiries and its been on amending mode from last 2-3 days.

As per weekly analysis, Western as well as Southern India remained on positive trend and reported price rise by INR 8,00-1,000/MT, whereas prices in North along with Central region slightly down by INR 200-300/MT.

Further, as per trade participants dull trades may remain due to uncertain directions and stock inventories are slightly piling up in comparison to average figures.

— Currently rebar (12-25 mm) price assessed at INR 39,100-39,500/MT Ex- Jalna, INR 38,700-38,900/MT Ex- Raipur, INR 41,00-41,400/MT Ex-Chennai. All prices are offered by medium mills, basic & excluding GST.

— Wire Rod trade discount offered by manufacturers/suppliers in Raipur have increased from last week which is now in the range of INR 600-1,500/MT.

— JSW Steel has announced to increase in rebar prices by INR 1,000/MT (USD 14) and the new prices are applicable with immediate effect as per sources. Other Indian large steel mills are expected to revise prices in the next few days. After consideration of price revised, rebar prices will be offered by large players close to about INR 42,500-43,000/MT ex-Mumbai & ex-Chennai and INR 43,500-44,000/MT ex-Delhi for the retail segment. All price are for 12mm & excluding GST.

Finish Flat Steel: Major Indian steelmakers planning to raise flat steel prices by around INR 1,000/MT amid higher raw material cost combined with improved bookings in domestic market. However official announcement will be made in first week of September.

However this week domestic prices in major markets remain largely stable. Few other regions like Ahemdabad, Kolkata and Ludhiana region witness uptrend in prices by INR 500/MT on improved demand.

Thus current trade reference prices for HRC (IS2062) 2.5 mm-8 mm is around INR 45,500/MT (ex-Mumbai) & INR 45,500/MT(ex-Delhi). The prices for CRC (IS513) 0.9mm is hovering in the range of INR 50,000-51,000/MT (ex-Mumbai) & INR 50,500-51,500/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST@18% on cash payment basis.

Mills are increasing prices on the backdrop of higher raw material prices.This week Odisha based major merchant miner raise iron ore prices by INR 300-400/MT. Meanwhile deprecation of Indian currency rupee against USD has resulted to higher prices of HRC imports to India.This in turn gives enough room to Indian steel manufacturers to increase flat steel prices.

Indian Raw material and Finished Steel reference Prices as on 1 September 2018 (Week 35)

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

Indian Export Reference Prices as on 1st September’18

Prices in USD/MT
Source: SteelMint Research