Week 34 concluded on an improving note as semi finish prices across major markets jumped sharply by upto INR 1,200/MT in a week. However, south market witnessed price correction of upto INR 500/MT.
Continuous rise in steel prices has cheered the traders and manufacturers as their inventories have almost cleared, which were on hold due to poor off-take.
Depreciation in INR, which has made imports dearer, is the key factor of hike in long steel prices. Alongside, the government is also planning to impose safeguard duty on import of steel products.
On the flip side, iron ore and Pig iron prices in Indian market remained stable with marginal correction in Pig iron offers.
Week 34 Trade Dynamics
1. Sponge iron price movement across major markets were noted as Durgapur at INR 15,200/MT (78 FeM; + 1,100), Rourkela at INR 14,000/MT (78 FeM; + 500), Raipur at INR 15,550/MT (80 FeM; + 350), Bellary INR 13,800/MT (78 FeM; + 300) and Hyderabad INR 15,500/MT (82+ FeM; – 400).
2. P-DRI prices hovered in the range of INR 12,900-15,500/MT across major markets.
3. Billet prices were assessed in Durgapur at INR 23,100/MT (+ 1,200), Rourkela INR 22,200/MT (+ 600), Raipur INR 23,100/MT (+ 900), Mumbai INR 25,500/MT (+ 1,000) and Chennai INR 23,550/MT (- 350).
Week 35 Prospects
1. Semi finish prices may sustain or gain due to improved global market sentiments and an expectation of safeguard duty imposition by Indian government.
2. DMF (District Mineral Fund) is likely to be notified shortly, which will increase the mining cost of iron ore. However, considering DMF contribution at the rate of 30% of royalty, too much increase in iron ore prices might not be seen.
3. Imported scrap offers currently seem directionless as Indian scrap importers prefer to wait & watch owing to depreciating INR. However, scrap import is likely to come down in near-term.
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