In week 33, Indian semis trade was quite dull as both sponge and billet offers moved down in the duration. In all markets, billet offers dipped by upto INR 700/MT and sponge merely by INR 100/MT.
Billet offers plunged down on the backdrop of aggressive selling pressure on small size manufacturers as few integrated plants in east & west regions are dumping huge quantity of billet in the open market. This led to oversupply of material and continues to pressure Indian billet market.
However, sponge offers corrected marginally as production & supply of the material was hand to mouth amid continued monsoon season.
Pig iron offers firm in Indian seconary market due to subdued trade activities. Recently, NINL also declared offers for N2 (foundry) grade material with no price changes.
Week 33 dynamics
1. 78-80 FeM C-DRI offers are assessed at INR 12,400/MT (+250) ex-Durgapur, INR 11,200/MT (0) ex-Rourkela, INR 12,300/MT (-100) ex-Raipur and INR 12,150/MT (-150) ex-Bellary. Price changes indicated are weekly.
2. 78-80 FeM P-DRI offers are at INR 10,350-12,800/MT ex-works.
3. 125×125 mm billet prices are evaluated at INR 19,500/MT (-150) in Durgapur, INR 18,750/MT (-450) in Rourkela, INR 19,450/MT (-600) in Raipur, INR 20,900/MT (-500) in Mumbai, INR 21,300/MT (-250) in Chennai and INR 21,000/MT (-400) in Hyderabad.
4. Odisha and Chhattisgarh based miners rolled over iron ore prices for Aug’16 deliveries. However, it is also heard by trade sources that Odisha based a big miner reduced 5-18 lumps prices by INR 100/MT to INR 1,900/MT; no official declartion has been made yet. While in global market, offers were firm to USD 61/MT (CNF China) due to upcoming G20 summit.
5. Pellet offers in major markets increased further by around INR 200/MT due to improved export demand and less number of sellers in domestic market. Current offers are prevailing at INR 2,900-5,300/MT ex-works.
6. Melting scrap offers fell by upto INR 500/MT owing to weak trade activities amid production cut by few induction operators.
Week 34 outlook
1.As per trade participants, semis market may remain volatile due to stability in raw material prices i.e. sponge & Pig iron and subdued trades.
2.Miners are likely to keep iron ore prices firm for the rest of month. However, it is expected iron pellet prices to rose further owing to increased export sales.
3. Traders mentioned that secondary Pig iron manufacturers are in wait and watch mode for NINL’s N1 grade fresh price circular. Till then, prices are expected to remain firm.
Indian raw material and semis prices as on 13 Aug’16
| Products | Markets | Prices in INR/MT | W-o-W |
| Billet 125*125 MM | ex-Mumbai | 20,900 | -500 |
| Scrap HMS (80:20) | ex-Mumbai | 15,100 | -200 |
| Sponge CDRI 80 FeM | ex-Raipur | 12,300 | -100 |
| Sponge PDRI 80 FeM | ex-Raipur | 11,150 | -150 |
| Pig iron Steel grade | ex-Raipur | 17,100 | 0 |
| Pellet Fe 63%, 6-20 mm | ex-Durgapur | 3,700-3,800 | +200 |
| Iron ore Fe 62%, 10-30 mm | ex-Mines, Joda loaded to wagon | 2,550* | 0 |
Basic prices, all taxes will be applicable
*Incld Royalty, DMF & NMET
Source: SteelMint Research
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