Weekly: Indian steel market snapshot

Spot steel trades in India’s secondary market remained supportive during the week-49.

As per SteelMint’s assessment, the prices of sponge iron & billet have increased by INR 200-1,700/t ,w-o-w, through the mid sized plants. Sponge prices increased majorly in south region & billet offers hike majorly in north, east and western markets. Also, rebar prices have increased by INR 800-2,200/t in most of the major supplying locations.

In context of large scale mills, the producers have announced a steep hike in finished flat steel prices by upto INR 2,000/t & in long steel by around INR 1,500-3,000/t for Dec’20.

Iron Ore and Pellets

• Odisha based merchant iron ore miners kept the prices unchanged for fines but softened the lumps offer after the OMC auction at the beginning of this week.
• Odisha’s state-owned miner, OMC, had sold 910,000 t iron ore lumps in the recent auction concluded on 2nd Dec. They have received an overwhelming response with the hike in bids upto INR 3,800/t over base price. However, after the auction OMC prices for lumps were still reasonable compared to the other merchant miners’ offers.
• NMDC has scheduled auctions for 75,600 t iron ore from Chhattisgarh mines on 10 Dec ’20. 50,400 t will be auctioned from its Bacheli mines and 25,200 t from Kirandul mines. Offered quantity comprises DR CLO, fines, lump & ROM.
• SteelMint’s bi-weekly domestic pellet index “PELLEX ” has decreased by INR 100/t to INR 11,500/t DAP Raipur. No deal has been reported for the Raipur market in this publishing window. Pellet makers in Raipur have kept their offers unchanged at INR 11,500/t (ex-plant). However, offers from Jharsuguda increased by around INR 100/t. Western India based- Jindal SAW hike pellet offer by INR 500/t to INR 11,500/t (Del. Kandla) this week.

Coal

• Australian coking coal prices have held firm this week, extending the gains made over the past fortnight with more bookings concluded at higher levels on FOB basis.
• A total of four transactions were reported to have lately taken place in the spot market. The first transaction was for an 80,000 t cargo of premium low-volatile hard coking coal, with January 1-10 laycan, traded at $102/t FOB Australia.
• The second was for another 80,000 t cargo of premium low-volatile hard coking coal, with January 10-19 laycan, traded at $103.50/t FOB Australia.
• The third and the fourth were for 80,000 t and 75,000 t of premium hard coking coals, with January 15-24 laycan, priced at $103/t FOB Australia.
• China delivered prices remained supported amid higher price expectations, on the back of strong demand from Chinese mills for low-volatile coals and supply tightness of non-Australian coals.
• Indian market sentiment was relatively steady but price expectations for seaborne coking coal were lifted higher amid the strength seen in domestic coking coal prices of all grades.
• Latest offers for the Premium HCC grade are assessed at around $101/t FOB Australia, $177.50/t CNF China and $114.20/t CNF India.

Ferrous Scrap

• Indian imported scrap market observed limited trade activities throughout this week. Buyers have adopted a cautious approach since the prices continued to move up on limited container and scrap availability, bookings may pick-up next week.
• Imported scrap bookings has put on hold till next week considering the price rally, cited a prominent steel maker and a regular buyer of imported scrap.
• SteelMint’s assessment for Shredded scrap in containers of UK/EU origin stands at $387/t CFR Nhava Sheva, moving up significantly by $17/t w-o-w.

Ferro Alloys

• Indian silico manganese prices increased in the week due to better demand price realization of steel. Meanwhile, prices of exports also increased amidst better international demand and retreating MEIS scheme.
• Indian ferro manganese prices increased amidst better steel demand and low availability of ferro manganese as the production shortage always hits the market.
• Indian ferro chrome prices decreased marginally due to tepid demand and low buying sentiments from China. Meanwhile, the domestic market remained flooded with ferro chrome forcing the producers for further correction in prices.
• Indian ferro silicon prices increased after Bhutanese producers increased their offers. Bhutan increased their prices as the international market picked up and imported materials are now much costlier to import due to container unavailability.

Semi Finished

On a weekly basis, domestic sponge iron offers incline by INR 400-1,600/t & billet by INR 200-2,100/t across regions. In this period major rise in billet prices reported in South India (Chennai) by INR 2,100/t.

• Indian sponge iron export prices gain by $15-20/t (w-o-w) to $370-375/t CPT Benapole, equivalent to $385-390/t CFR Chittagong, Bangladesh. Total of 15,000 t deals reported to Bangladesh this week.
• Induction grade billet export offers surged by $25-30/t to $485-490/t exw Durgapur, equivalent to $510-515/t CPT Nepal. However demand was slightly low on account of a sharp surge in price range.
• Steel grade pig iron prices rose by INR 500-2,500/t with a major rise of INR 2,000-2,500/t in eastern region, followed by INR 500-1,000/t in central & northern regions. Temporary supply shortage has resulted in a sharp surge in offers in eastern India.
• SAIL conducted an auction for 2,000 t basic grade pig iron on 3rd Dec from IISCO, Burnpur & the entire material was booked at INR 30,600/t exw.
• Tata Metaliks has raised basic (steel) grade pig iron price by INR 400/t to INR 31,700/t ($430) & foundry grade pig iron by INR 500/t to INR 33,700/t ($456), exw-Kharagpur, eastern India.
• Vedanta Limited has increased its offer for foundry grade pig iron by INR 1,000/t for Dec ’20 to INR 36,700/t DAP Gujarat.
• SAIL’s auction for 14,250 t (5 rakes) basic grade pig iron on 3rd Dec from Bokaro Steel Plant, Jharkhand has received bid at around INR 29,500/t exw.

Finished longs

India’s finished long steel market of secondary mills observed a huge spike in prices and w-o-w basis rebar prices increased by INR 800-2,200/t in most of the major supplying locations.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 38,300-38,500/t exw Raipur, INR 40,800- 41,100/t exw-Jalna.
• Trade discount given by Raipur based heavy structure manufacturers stood at INR 700-1,000/t and the trade price of 200 Angle is at INR 42,000-42,400/t exw.
• Trade discounts in Raipur wire rod is currently at INR 1,000/t and trade reference prices stood at INR 39,400-39,600/t exw Raipur, INR 39,800-40,200 exw Durgapur, size 5.5 mm.
• Tata Steel Ltd has raised structural pipe price by INR 3,000/t to INR 52,500/t ($714) FoR Jamshedpur (eastern-India), w.e.f 1st Dec.
• APL Apollo Tubes Ltd. has increased pipe prices by INR 1,000/t to INR 49,000/t ($667) FoR in Chhattisgarh w.e.f 1st Dec.

Finished Flats

• Indian steel mills have announced a steep hike in list prices of HRC and CRC by INR 2,000/t for Dec deliveries. Major steel mills based in western India are sitting with lean inventories. Also, around 80,000 t to 1,00,000 t HRC is used for downstream products causing tight supply, thus mills are delaying supply on increased bookings.
• Another reason attributed for the steep hike in flat steel prices can be higher iron ore prices, NMDC has announced the price of hike in iron ore for Dec’20. Prices have increased further to 14% for its Chhattisgarh based mines. Last month NMDC increased iron ore prices twice.
• Also robust auto sales and double-digit growth in consumer durables resulted in a steep hike in domestic prices.
• HRC (IS2062 2.5-8 mm) stood at INR 48,250-49,500/t (exy Mumbai), INR 49,000- 50,000/t (exy Chennai),INR 49,500-50,000/t (exy Delhi).
• CRC (0.9 mm GR) is around INR INR 56,000-57,000/t (exy Mumbai) and INR 56,500-59,000/t (exy Delhi) and INR 58,000-59,000/t (exy Chennai). Prices do not include GST extra @18%.

Reference Prices as on 5 Dec’20 (Week 49)
Prices are exw & exclusive of GST

Indian export reference prices as on 5 Dec’20
Prices in $/t
Source: SteelMint Research