Indian spot steel prices corrected sharply yesterday on selling pressure building up on mills as several states extended the lockdown to first week of June. It was learnt that some big mills in eastern region have shut down their rolling facilities and are offering billets in the merchant market on concerns of rising inventories. This is likely to add more supplies of billets in the market, which would put sponge and pellet prices under pressure. SteelMint’s daily billet and scrap (end cutting) index dropped by INR 1,000/t to trade at INR 41,200/t ex-Raipur and INR 38,700/t DAP Mandi, respectively.
On the other hand, flat steel prices continued to remain supported on the back of pending deliveries of export bookings. Indian flat steel prices are still trading at a discount of 15-20% as compared to the landed cost of imports, JSW Steel’s senior management highlighted in the investor conference call organised yesterday. Steel exports of most mills in Q1 FY ’22 are expected to remain on the higher side, sources added.
In another out of the ordinary trade, pellets were heard being offered from West Bengal to markets like Raipur and Raigarh at a rate lower than what was being offered by local manufacturers.
The export market continues to remain quiet due to high volatility in Chinese steel futures and lower availability of vessels for Indian cargos. There is news that Chinese ports have tightened quarantine rules for Indian vessels and crew making it difficult for Indian exports to easily hire vessels. Notably, China accounted for around 25% of total steel exports in FY ’21.
Chinese steel futures are showing some resistance after falling over $150/t in the last few trading sessions. It would be too early, however, to say if markets have bottomed out. Markets are likely to wait till next week to see the direction emanating from China.
Leave a Reply