Weekly: Indian Steel Market Snapshot

Indian steel market remained abuzz with Odisha iron ore mines auction.  Primary mills are expected to increase finished steel prices for Feb’20 for which the announcement is expected to be made early next week. However in secondary market, Indian steel prices fell during the week-4 (25th Jan-1st Feb’20) on account of poor lifting and less inquiries.

As per assessment, during the week prices of Semis & Finished steel products through the mid sized mills fell near to INR 100-900/MT (upto USD 13) across major Indian markets.

However, the domestic Flat steel prices-maintained stability, which is expected to be a hike in coming week by INR 1,500/MT with the fresh price revision by large scale mills.

IRON ORE and PELLETS

–JSW Steel bagged KJS Ahluwalia’s Nuagaon iron mines at a premium of 95.2%. NMDC has increased floor prices by around INR 300-400/MT in lumps and INR 100/MT fines (depending on grades) for Karnataka e-auctions.

— The Honorable Supreme Court of India, on 30th Jan’20, allowed mining firms to transport the validly mined ore from the Goan mines if they have paid the royalty to the government and mined before 15 Mar’18.

— PELLEX stable at INR 7,150/wmt (DAP Raipur). No pellet deals heard from Raipur pellet makers. However, at the end of last week pellets, deals of around 20,000-25,000 MT from Odisha and other location of Chhattisgarh reported at INR 7,100/MT (DAP Raipur). Jamshedpur based pellet maker concluded around 10,000 MT pellet deal at INR 6,300/MT (EXW) this week. Bellary based pellet makers sold around 23,000 MT pellets for Fe 63% grade at INR 6,850-7,000/MT (EXW) this week.

— No pellets export deal heard this week heard. Global iron ore fines (Fe 62%) prices have come down sharply by USD 10/MT to USD 83/MT. SteelMint assessment for standard grade pellets (Fe 64%, 3% Al) stands at USD 120-122/MT, CFR China down by USD 3/MT against last week.

COAL

Australian premium low-volatile (PLV) hard coking coal (HCC) prices have remained mostly unchanged this week in the midst of a quiet Asian market. Market participants stayed on the sidelines considering the uncertainties affecting demand and supply of coal in China. Alongside incessant rainfall in Queensland is also affecting buying sentiment.

Chinese market sources concurred that steel markets will react negatively to the novel corona virus outbreak, which will have implications on coal needs and prices.

— Latest offers for the Premium HCC grade are assessed at around USD 153.00/MT FOB Australia, USD 163.00/MT CNF China and USD 164.70/MT CNF India.

FERROUS SCRAP

Imported scrap offers to India moved down, following global downtrend, while buying activities picked up some momentum with both shredded and HMS bookings getting concluded. Market however remains cautious on any potential instability from Chinese steel market amid corona-virus risks.

— SteelMint’s assessment for containerized Shredded 211 from North America and Europe to India now stands at USD 290-294/MT CFR, down by USD 6-8/MT W-o-W, against USD 295-299/MT last week. Few bookings for Shredded were reported to Nhava Sheva and Mundra at USD 291-293/MT CFR.

— Dubai origin HMS 1 super (no ci gi) is being offered at around USD 282-284/MT CFR, while HMS 1&2 bookings were reported at around USD 272-275/MT CFR amid few bookings. UK HMS 1&2 (80:20) offers too plunged and are currently being offered at around USD 275-278/MT CFR, while South African origin HMS 1 (hand-loaded) offers are now down to USD 290/MT CFR. West African HMS to Goa was reported to be offered at USD 283/MT CFR Goa, with bids significantly lower.

FERRO ALLOY

— Silico Manganese prices fell marginally amid oversupply. Most Silico Manganese producers operated in full capacity due to increased prices. This however created oversupply in the domestic market.

— Ferro Manganese Prices remained stable amid down-trending demand. Although, a fall in prices is unlikely as the number of producers for Ferro Manganese is scarce.

— Prices for Ferro Chrome remained stable despite limited supply. Most of the producers have reduced their production of Ferro Chrome and a few producers have also shifted to Manganese alloys production.

— Indian Ferro Silicon prices escalated in the past week amid short supply. Producers are facing a shortage of Charcoal, and this has led to substantially reduced production.

SEMI FINISHED

Indian domestic billet offers plunged by INR 100-900/MT (USD 1-13) across the country on account of mis-match trade cycle amid slower demand in the domestic market. Inline, Sponge iron prices fall slightly by INR 100-300/MT across regions following drop in Billet prices.

— Indian sponge iron export offers to Bangladesh fell by USD 5/MT and latest offers reported at USD 295-300/MT CPT Benapole, equivalent to USD 310-315/MT CFR Chittagong, Bangladesh.

— Indian secondary mills’ export offers (via road delivery) for 100*100 mm billet (induction grade) assessed at around USD 440/MT and USD 495-500/MT for Wire rod (commercial grade), CPT Nepal.

— Jindal Steel has increased steel grade pig iron prices by INR 200/MT to INR 29,000/MT ex-Raigarh, Central India.

— SAIL has floated export tender for 10,800 MT prime mild steel non alloy concast billets (size 125*125 mm) from Durgapur Steel plant. The last date for bid submission is 04 Feb’20 by 16:00:00 HRS [IST].

— Vizag Steel has invited a e-tender for the export of 30,000 MT Bloom. Interested bidders can submit their bids till 14:00 hrs on 05 Feb’20.

FINISH LONG

Indian Finish Long Steel market has observed the limited trade volume in most of the regions where rebar prices fall up to INR 800/MT W-o-W and west region-based few particular markets notified with a mixed response like Jalna, Goa & Mumbai.

However, some major supplying regions reported minor selling pressure exists where discount level might get stretch up to a certain level or might consider minor price correction as production and inventory level is adjusted as per the market condition.

— The trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 33,300-33,600/MT ex Raipur, INR 35,900-36,300/MT ex-Jalna & INR 35,400-35,700/MT ex Chennai.

— Central region, Raipur based heavy structure manufacturers have maintained trade discount by INR 1,000-1,500/MT and Current trade reference prices at INR 37,100-37,500/MT (200 Angle) ex-work.

— Trade discounts in Raipur wire rod is currently at INR 200-300/MT and trade reference prices stood at INR 32,900-33,100/MT ex-Raipur and INR 33,900-34,200/MT ex-Durgapur, size 5.5 mm.

— APL Apollo Tubes Ltd, has increased Pipe price by INR 1,000/MT to INR 43,500/MT (USD 610); ex-plant in central India, Chhattisgarh for Feb ’20.

FINISH FLAT

The slowdown in the buying activities amid weak demand in the domestic market led to a slight decline in a few markets like Faridabad and Mumbai. However, the prices were steady in major markets.

Market participants turned observant during the week ahead of the budget announcement and slowed down procurement rates as they are holding enough inventories over previous restocking activities.

Current trade reference prices for HRC stands at INR 39,250-39,500/MT ex-Mumbai, INR 39,000-39,500/MT ex-Delhi, and INR 39,500-40,500/MT ex-Chennai.The trade reference CRC (0.9 mm, IS 513) prices on a weekly premise assessed at INR 45,000-45,500/MT ex-Mumbai, INR 42,700-44,500/MT ex-Delhi, and INR 45,500-46,000/MT ex-Chennai. Prices mentioned above are basic, and extra GST@ 18% will be applicable.

Further, the market participants anticipate the steel mills to announce a hike in prices by around INR 1,500/MT for Feb’20.

Reference Prices as on 1st February 2020 (Week 5)

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

Indian Export Reference Prices as on 1st Feb’20

Prices in USD/MT
Source: SteelMint Research