Steel prices in Indian spot market which had been falling for quite some time, have now started showing some strength. SteelMint’s daily billet index closed yesterday at INR 41,300/t ($569), up by Rs 1,100/t ($15) with trade volumes* being recorded at a 45 days high. The scrap index also increased sharply by Rs 700/t on fairly active buying interest.
Prices have moved up based on the positive trends being seen in China, where steel futures increased for the second consecutive day, yesterday. The SHFE rebar futures settled with an increase of RMB 116/t ($18/t) on a day-on-day (d-o-d) basis at RMB 4,933/t ($775/t).
Market participants are hopeful that if Chinese futures market increases or at least remains stable, export trades are likely to resume, which have remained subdued for the last ten days. Some participants have also reported to have heard a deal of Indonesian billet at around $700-710/t CFR South East Asia. Chinese buying interest could be around $690-700/t CFR levels, few traders confided in SteelMint. This is higher by about $30-40/t from last indicative prices. However, a few of the other traders mentioned that there was still no firm buying interest from China at the moment & there were chances that prices may firm up only when China returns back into the market.
Indian large mills have indicated that HRC prices may increase for June deliveries, which continues to trade at a discount compared to the landed cost of imports. However long steel prices are not likely to increase owing to reduced construction activities, a characteristic of the upcoming monsoon season.
Indian steel prices remain dependent on global sentiments, to a large extent, because of high exposure to exports. Indian is currently exporting almost 20-25% of its production.
Note:* Trade volumes- Daily deals recorded for Raipur market at the time of index computation
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