Weekly: Indian steel market snapshot

Indian spot steel trades in the secondary market remained subdued, as prices rose sharply during the beginning of the week. However, later in the week prices fell on account of limited inquiries.

As per SteelMint’s assessment during the week-41, prices of semis & finished long steel increased by INR 100-1,200/t. Also, the finished flat steel prices remained supported as prices of HRC hit over 1.5 years high.

Iron Ore & Pellets

• SAIL conducted an auction for 296,000 t iron ore fines (Fe 61.3%-61%) from its Bolani mines in Odisha on 6th Oct’20. The entire quantity received bids for Bolani at INR 2,510-2,550/t (Loaded to wagon, taxes extra) on base price as per the sources. NMDC increased iron ore fines from Chhattisgarh mines by INR 200-240/t for October month.
• SteelMint’s domestic pellet index “PELLEX” up marginally by INR 50/t to INR 8,450/t DAP Raipur, amid high trades during the week. SteelMint’s price assessment for other key markets like Durgapur, Bellary have fallen by INR 100-200/t w-o-w. Domestic pellet market demand improved a bit after fall in prices in most of the regions.
• SteelMint’s pellet export index (FoB east coast India) has increased marginally by $2/t w-o-w to $122/t on 7th Oct’20. However, market participants highlighted no firm trades to have concluded due to Chinese holidays.

Coal

• Latest offers for the Premium HCC grade are assessed at around $132.25/t FOB Australia, $143.75/t CNF China and $145.15/t CNF India.

Ferrous Scrap

• Indian imported scrap trades improved this week as buyers remained active for booking both in western and southern India. SteelMint’s assessment for Shredded scrap in containers of UK origin stands at $309/t CFR Nhava Sheva, mostly stable w-o-w.
• The demand for scrap has improved on a weekly basis as a number of deals in containers were reported throughout this week. Despite UAE’s extend scrap export ban, Indian buyers have actively booked HMS 1&2 (80:20) scrap from UAE at a favourable price level, SteelMint leant.
• A large fire has broken out a major UK based global scrap supplier’s scrapyard, affecting around 20,000 t of scrap was available at the site as per the reports.

Ferro Alloys

• Indian silico manganese prices increased at the start of the week after MOIL’s price revision of manganese ore. However, the offers were retracted due to dull demand. Current prices in India are at INR 59,500-60,000/t.
• Prices of ferro manganese fell due to dull demand in the market. Meanwhile, the export prices also fell due to tepid demand. Current assessments are at INR 60,000-60,500/t which is down by upto INR 2,000/t w-o-w.
• Indian ferro chrome prices increased by INR 4,000 w-o-w as chrome ore prices increased to two years high in the recently concluded OMC auction.
• Indian ferro silicon prices came down to INR 80,000/t in line with an overall downtrend in the steel market. Few deals were heard to be concluded at lower levels also.

Semi Finished

Indian semi finished steel prices increase marginally and as per SteelMint’s assessment, the domestic billet prices have increased by INR 200-500/t & sponge iron by INR 300-700/t. Manufacturers reported they have sufficient orders in hand.

• Induction grade billet export offers up this week by around $5/t to $400/t exw Durgapur, equivalent to $425/t CPT Nepal, via road delivery.
• Indian sponge iron (80 FeM, 100% lumps) export offers gain by $10/t, w-o-w, to $295-298/t CPT Benapole, equivalent to $310-315/t CFR Chittagong, Bangladesh.
• Pig iron prices increased by INR 400-1,000/t on account of supply shortage as about 3 merchant plants in eastern India hold supply due to maintenance shutdown.
• SAIL is going to conduct an auction for 5,700 t mixed OG (basic)grade pig iron i.e 2 rakes of 2,850 t each, from Bokaro Steel Plant, Jharkhand. The auction is scheduled on 14 Oct’20.
• SAIL conducted an auction for around 6,000 t steel grade pig iron on 9th Oct from its Bhilai Steel Plant (BSP), Chhattisgarh & the entire material got booked at INR 26,950-27,200/t exw.
• Vizag Steel, a state-owned steelmaker, has floated a 30,000 t (150*150 mm, 3SP/4SP grade) bloom export tender for spot sale, against 100% advance payment terms. The shipment is likely to be scheduled by 20 Nov’20.
• Chhattisgarh government has decided to extend the rebate on power tariff, which ended on 31st Mar’20. In FY’20, the total rebate in power charges was about INR 1.2/unit on the load factor above 3,000 KVA.
• Tata Metaliks Ltd, has reduced basic grade (Si 1-1.5%) price by INR 800/t to INR 29,800/t ($407), however, rolled-over foundry grade price at INR 32,500/t ($444) exw Kharagpur, for Oct deliveries.

Finished Longs

India’s finish long steel market of mid-sized mills observed improved demand and moderate trade activity in this week, by which rebar manufacturers in most of the locations have increased their offers by INR 300-1,200/t, however from last couple of days minor price correction or variation in discount offers has also been noticed due to lacking of future booking inquiries.

• Mid scale mills wire rod export offers up by $5/t to around $445-447/t exw Durgapur, equivalent to $470/t CPT Nepal.
• Trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 32,100-32,300/t exw Raipur, INR 33,700-34,000/t exw Jalna.
• Trade discount given by Raipur based heavy structure manufacturers is at INR 1,000-1,300/t and the trade price of 200 Angle stands at INR 36,400-36,800/t exw.
• Trade discounts in Raipur wire rod is currently around at INR 1,000-1,200/t and trade reference prices stood at INR 32,800-33,300/t exw Raipur, INR 32,600-33,000 Durgapur, size 5.5 mm.

Finished Flats

India’s domestic hot-rolled coil prices recorded a hit over 1.5 years high as per data maintained by SteelMint. SteelMint’s benchmark assessment for commercial-grade HRC stood at INR 42,000-43,500/t (exy Mumbai). Similar levels were last seen in Jan ’19.

Recently all integrated steel mills have announced a steep hike in list prices of HRC and CRC on 1st Oct’20 by INR 1,000-2,500/t for Oct deliveries. Supply crunch and robust demand in auto and white good sectors resulted to steep hike in prices.

SteelMint price assessments of key trade markets 

• HRC (IS 2062, 2.5-8mm) prices are assessed at INR 41,500-42,500/t (exy Delhi) while INR 42,000-42,500/t (exy Chennai).
• CRC (0.9 mm IS513 GR) are currently seen at INR 51,500- 52,500/t (exy Delhi) and INR 51,000-52,000/t (exy Chennai).
• Prices do not include GST extra @18%.

In the month of Sep’20 steel mills have announced a hike in HRC and CRC prices twice so far this month, except SAIL increasing thrice this month.

Reference Prices as on 10th Oct’20 (Week 41)
Prices are Exw & exclusive of GST

Indian export reference prices as on 10th Oct’20
Prices in $/t
Source: SteelMint Research