Indian Steel Market Weekly Snapshot

Indian steel market moved upwards in week-7 (12-18 Feb’18) on fluctuating domestic demand and gradual increase in exports inquiries.

In this week, prices of Semis & Long steel rise by around INR 400-1,200/MT (USD 6-19). Although, Flat steel producers maintained offers at same levels following moderate demand by domestic buyers.

Iron ore and pellets – In a major development in the Odisha illegal mining case, the Supreme Court has on 15 Feb’18 allowed two mines of Essel Mining – Jilling Langalota and Koira mines to resume operations. However resumption at Serajuddin mines is still awaited and the miner’s case will again be heard on 23 Feb’18. However other Odisha merchant miners continue to hold offers.

Pellet buying interest in domestic market continued to remain dull this week. Market participants reported limited trades. Central India based market participant’s shared limited buying interest from sponge manufacturers. Although pellet offers from major pellet makers are heard around INR 7,000/MT (ex-works, GST extra). Durgapur pellet offers have been declining over the last few weeks. Durgapur stands at INR 6,000-6,300/MT this week.

Scrap: Strong domestic steel demand, range-bound global scrap offers and high local scrap prices have engrossed Indian mills to continue scrap imports again this week.

— Two more bulk Shredded cargoes for USA origin have booked at USD 370-375/MT, CFR India levels. Importers remained active also in booking containerised scrap despite the slight uptick in offers by USD 5-10/MT W-o-W. Shredded scrap in containers from USA assessed at USD 375-380/MT, CFR. Offers for HMS 1&2 (80:20) assessed in the range of USD 340-350/MT, CFR from USA, Europe, and West Africa origins while from Dubai were around USD 360-365/MT, CFR Nhava Sheva.

— Goa based plants have booked HMS I/II at USD 340-350/MT from West Africa. In latest update containerise material have been booked at USD 340/MT CFR India & arrival period for the material reported in couple of months.

Coking Coal : Aggressive buying by Chinese steel makers ahead of the Lunar Year Holidays in that country continued to impart upward pressure to Coking Coal prices in Australia. Steel makers in China were stocking the coal in advance as they plan to resume full-fledged production after the holidays getting over. Buoyed by the robust demand, spot prices of the Premium HCC have reached around USD 227.50/MT FoB Australia. The buying appetite is strong among the Indian steel makers too.

Semi finished steel market showed improvement on weekly basis, domestic sponge prices increase by INR 400-800/MT (USD 6-13) & Billet by 400-1,200/MT (USD 6-19) owing to good demand on improved domestic & export inquiries. Few weekly trade wise:-

— Indian sponge iron (DRI) export offers down by USD 10/MT W-o-W. The exporters reported fresh offers at around USD 378-380/MT CPT Benapole (land port of India & Bangladesh) against last week of USD 390-395/MT. On CFR basis, the current offers are hovering at USD 395-400/MT, CFR Chittagong, Bangladesh.

— RINL has concluded its 5,504 MT billet & 11,008 MT bloom export tender to Nepal at around USD 510/MT ex-mill, this tender was issued on 2nd Feb 2018

— In the initial days of week, SAIL (BSP) shuts down Blast Furnace No. 1 after a major accident took place in Tuesday morning. Annual production from this furnace is around 700,000 MT

— Indian Induction grade billet export offers to Nepal increased by USD 10-15/MT W-o-W and are assessed in the range of USD 500-502/MT ex-Rourkela & USD 508-510/MT ex-Durgapur,

— Tata Metaliks, India’s one of the major foundry grade pig iron manufacturer has raised its prices by INR 500/MT (USD 8). The total price rise during Feb’18 are reported at INR 800/MT. The latest offers are reported at INR 31,300/MT (USD 490) for high silicon, foundry grade pig iron

— In the week private pig iron producers in Eastern India have increased steel grade prices by INR 500-1,000/MT due to shortage of material post the hold sales by couple of big manufacturers based in Jharkhand. Meanwhile, in Central region prices more ore less firm amid average demand.

Finish-Long Steel : As per week assessment, market has been registered thin shade considering price range and bookings were made in a heed mode as slight fluctuations have been noticed on week basis.

Further, as per few manufacturers opinion prices may remain volatile at current levels as demand is little bit fluctuated but perceived as per requirement by trade participants.

— Due to pollution concern few plants closure in Chennai doesn’t came with prospective results as trade sentiments believed to get elongated prices around by INR 1,000-1,200/MT but slight changes have been registered in existing range as demand surrounds nearby.

— In a mid week, rebar gauge parity increased by INR 300/MT for 8 & 32mm as well as 10-25mm in Hyderabad. Similarly, in Raipur where steel mills have increased rebar gauge parity for 8, 10 & 32mm by INR 300/MT and are assessed – 10 mm (+ INR 2500) and 8 & 32mm (+ INR 3500), meanwhile for rest of sizes the price difference are same i.e. 12-25mm (+ INR 2200), Basic 28mm.

Flat Steel Market : This week Indian flat steel prices have remained unaltered. Slow demand and supply constraints have kept domestic flat steel prices supported.

Currently trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed in the range of INR 43,500-44,000/MT (ex-Mumbai), INR 44,500/MT (ex-Delhi), INR 44,500MT (ex-Chennai).The prices mentioned above are basic prices excluding GST @ 18%.

Trade reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 48,000-48,500/MT (ex-Mumbai) INR 48,000-48,500/MT (ex-Delhi) and INR 48,000-48,500/MT (ex-Chennai). The prices mentioned above are basic prices excluding GST@18%

Also, Tata Steel Kalinganagar plant is undergoing maintenance issue in their plant due to which they are unable to supply adequate material in domestic market. The repair work has already been started and actual production will come up till march.

Similarly, other major mills are already holding backlog orders for exports and few orders from auto-mobile companies. Thus demand supply mismatch has kept the domestic flat steel prices on higher side.

Thus, amid supply constraint domestic flat steel prices is expected to remain firm in near term. Meanwhile steel mills have adopted wait and watch mode for next price revision in the month of March.

Indian Raw material and Finished Steel reference Prices as on 17 Feb 2018 (Week 07)

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

Indian Export Reference Prices as on 17th Feb’18

Prices in USD/MT
Source: SteelMint Research