Weekly: Indian steel market snapshot

In week-34, Indian domestic steel prices of secondary players dropped sharply on account of limited spot trades amid dull market sentiments.

Prices of semi-finished & finished long steel of mid-sized mills fell sharply by INR 300-2,200/t this week. However, finished flat steel prices have witnessed increase in the tight supply of thin gauge HRC and gradual restocking after weeks of subdued demand from the distributor’s side.

Iron Ore & Pellets

• SteelMint’s Odisha iron ore index increased by INR 500-600/t w-o-w on supply tightness. Iron ore fines (Fe 63%) prices stand at INR 2,900-3,100/t and 5-18 mm (Fe 63%) around INR 5,200-5,500/t (ex-mines, included royalty, DMF and NMET) for this week. However, very limited deals happened at the increased offers so far.
• SteelMint domestic pellet index “PELLEX” decreased sharply by INR 500/t on Friday (21st Aug’20) to INR 7,800/t DAP, Raipur in absence of trades, and the recent plunge in semi-finish steel prices. Other regions like Durgapur pellet indicative prices also down to INR 8,200/t exw, however, few major players of pellet were not offering at the end of this week. Southern India Bellary offer was also down this week to INR 7,800-8,200/t against INR 8,100-8,400/t last week.
• SteelMint’s pellet index (FoB east coast India) has increased by $6/t w-o-w to $115/t on tracking bullish global iron ore price trend, including in India. Two deals were reported last week at $ 124/t CFR China.

Coal

In India, no transactions for spot cargoes of seaborne coking coal were heard to be done during the current week.

Indian market participants anticipate seaborne coking coal demand to eventually pick up on restocking needs, as most steel mills have now resumed normalized operations.

• Latest offers for the Premium HCC grade are assessed at around $106.75/t FOB Australia, $118.00/t CNF China and $120.30/t CNF India.

Ferrous Scrap

Indian import scrap trades slowed down as mills showed less interest in buying at inflated prices following a decline in finished steel prices of secondary mills. The Ganesha and upcoming Muharram festivals could be another factor for slowing down trade activities.

• Recently, India’s major stainless steel producer has booked 4,000 t M S turning from Europe in containers at $274/t, CFR Nhava Sheva. Another deal, Australian HMS 1&2 (80:20) in containers was sold at $300/t CFR basis.
• SteelMint’s assessment for shredded 211 from UK/Europe in containers stood at around $313/t CFR Nhava Sheva, down by $2/t in comparison to last week’s closing.
• UK/Europe HMS (80:20) offers were reported at $285/t CFR Nhava Sheva HMS 1&2 (80:20) from Middle East is being offered at around $298-300/t CFR Nhava Sheva depending on the quality of the material. Dubai HMS (80:20) offers were heard at $295-300/t CFR Nhava Sheva. HMS 1&2 (80:20) from South African origin being reported at $290-295/t CFR to Nhava Sheva.

Ferro Alloys

• Indian silico manganese prices went up by around INR 1,500/t in the domestic market on improved demand and supply shortage. The transactional price of silico manganese is in the range of INR 62,500-63,000/t exw.
• Ferro Manganese prices increased in the week owing to the improved domestic market and limited production.
• Ferro Chrome prices went up by INR 500/t due to a pickup in demand along with limited production of the alloy due to chrome ore shortage. Ferro chrome prices are at around INR 62,000-63,000/t exw Odisha.
• After getting permission to export, the Bhutanese producers have increased the offer levels to INR 82,000/t exw Bhutan and the prices from Guwahati is much higher at around INR 92,000/t.

Semi Finished

Indian billet trades slow-down this week as prices slump by INR 300-2,100/t amid poor off take of finished goods. In these period major fall of INR 1,900-2,100/MT in billet seen in central, east & southern India.

Similarly, sponge iron offers dropped by INR 800-2,000/t w-o-w following significant fall in billet prices.

• SAIL conducted auction for 4,000 t mixed prime grade pig iron auction from its Bhilai Steel Plant (BSP) in Chhattisgarh on 21st Aug & 3,950 t was booked at INR 26,000-28,150/ exw.
• Vizag Steel has floated an export tender of 20,000 t blooms (200*200 mm) for Aug-end shipment. The due date of the tender is 24 Aug’20.
• SAIL has schedule an auction to sale 1,700 t steel grade pig iron on 24th Aug ’20 from its Rourkela Steel Plant (RSP).
• Induction grade billet export offers drop to around $391-393/t exw Durgapur, equivalent to $420/t CPT Nepal, via road delivery. Meanwhile, deals of blast furnace grade (about 2-3 rakes) were reported at around $445/t CPT Nepal.
• Indian sponge iron (80 FeM, 100% lumps) export offers drop slightly by $6-8/t to $305-308/t CPT Benapole, equivalent to $325-328/t CFR Chittagong, Bangladesh. The prices fell on account of plunged domestic offers.
• Pig iron prices dropped by INR 300-1,000/t with sharp corrections of INR 500-1,000/t in central & northern India. The prices fell owing to drop in sponge iron & billet prices along with low bids in SAIL’s pig iron auction.

Finished Long

India’s finish long steel market of medium and small scale mills in this week observed a sharp downfall in prices by INR 900-1,700/t in most of the major supplying locations, except in Chennai and Bangalore markets of the southern region.

• Trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 32,500-32,700/t exw Raipur, INR 33,600-33,900/t exw Jalna.
• Trade discount given by Raipur based heavy structure manufacturers is at INR 700-1,000/t and the trade price of 200 Angle is at INR 35,800-36,200/t exw.
• Trade discounts in Raipur wire rod are currently at INR 1,200-1,400/t and trade reference prices stood at INR 31,300-32,000/t exw Raipur and INR 32,800-33,200/t, exw Durgapur, size 5.5mm.
• Mid scale mills wire rod export deals learned of around 500-1,000 t at around $440/t exw Durgapur, this is equivalent to $475/t CPT Nepal.

Finished Flat

Indian HRC prices recorded an almost one year high in Aug ’20 amid tight domestic supplies. Mills have announced three consecutive price hikes this month on limited supply and restocking demand in the domestic market.

Further, on a weekly basis, domestic traded HRC prices increased by INR 800-1,000/t.

SteelMint’s assessments of HRC and CRC prices-

• HRC (IS 2062, 2.5-8 mm) prices were at INR 40,250-41,250/t  exw Mumbai, INR 40,500-41,000/t exw Delhi while INR 40,000-41,000/t exw Chennai.
• CRC (0.9 mm IS513 GR) prices were assessed at INR 45,500-46,000/t exw Mumbai, INR 45,000-46,000/t exw Delhi and INR 45,500-46,500/t exw Chennai.

The prices mentioned above do not include 18% GST.

“Few trades are taking place amid higher prices. Trade volumes have declined and retailers are holding onto their stocks and are reluctant to purchase at higher prices. Deliveries are getting delayed due to tight supply”, said a stockist based in Faridabad.

Reference Prices as on 22nd Aug’20 (Week 34)

Prices are Exw & exclusive of GST

Indian export reference prices as on 22nd Aug’20

# Correction

Prices in USD/MT

Source: SteelMint Research