Weekly: Indian steel market snapshot

Spot steel trades in India’s secondary market remained supportive on the back of mills 2nd price hike announcement for Dec ’20.

Domestic billet prices have increased by INR 500-1,700/t ($7-23), while sponge iron by INR 300-1,000/t, w-o-w, according to SteelMint’s assessment. Also, the rebar market has registered a huge spike in prices of around INR 600-1,400/t w-o-w, basis in most of the major supplying locations.

In context to finished flat steel, the primary mills have announced a second price hike of around INR 1,500-2,000/t ($20-27) for December month.

Trade sources are expecting prices to remain supported on account of high cost raw materials, strengthening global prices along with active domestic demand.

Iron Ore and Pellets

• Odisha based merchant iron ore miners’ prices remained slightly softened amid lack of demand on increased offers. However, prices of India ore remained volatile.
• SAIL booked iron ore fines (Fe 62.5%) from Bolani mines, Odisha at INR 5,400/t (loaded into rakes and excluding royalty) over set base price of INR 4,700/t, Bids have slightly softened by around INR 150/t against last auction of similar grade held in end Nov’20.
• NMDC conducted has conducted an e-auction from its Chhattisgarh mines and received bids for 50,000 t out of 75,600 t material put for auction. DR CLO received bids were up by around INR 1,880/t, ROM by 1,300/t and fines by INR 1,200/t above the set base price. Notably, the miner had raised prices upto 14% in Dec’20.
• SteelMint’s bi-weekly domestic pellet index “PELLEX” has increased by INR 150/t to INR 11,550/t DAP Raipur.
• Western India based- Jindal SAW hike pellet offer by INR 800/t to INR 13,000/t (Del. Kandla) this week.
• SteelMint’s pellet export index (FOB east coast India) increased to $158, up by $17/t w-o-w.

Coal

• Australian coking coal prices have dipped slightly this week, despite continued demand from non-Chinese steelmakers for competitively priced premium hard coking coals. However, a couple of fresh bookings for premium coking coal were done earlier this week, supporting prices on an FOB basis.
• Trading activities in the ex-China FoB market have slowed down during the latter part of this week following the conclusion of a series of transactions in the past two weeks.
• A further slowdown is expected toward the end of the year, while the Indian market is not expected to see significant spot purchases until at least mid-January. Meanwhile, the Chinese market continued witnessing scarcity of non-Australian coking coal cargoes and there was continued interest to resell Australian cargoes.
• Latest offers for the Premium HCC grade are assessed at around $101.50/t FOB Australia, $184.00/t CNF China and $115.25/t CNF India.

Ferrous Scrap

• Following the global price uptrend, Indian imported scrap offers too crossed $400/t CFR mark this week. After witnessing some bookings towards the middle of this week, buying inquiries for imported scrap fell on a sharp hike in offers along with increase in price gap between domestic scrap and the landed cost of imports.
• As per SteelMint analysis, domestic scrap offers are cheaper by INR 2,500-3,000/t compared to the landed cost of imported scrap. Hence no firm Shredded trades were heard at increased offers of $410-420/t CFR.
• On the other hand, increased freight charges on low container availability in various supplying countries kept the offers at higher level. Notably, imported scrap prices have moved up significantly over $70-80 in last one month.
• SteelMint’s assessment for Shredded scrap in containers of UK/EU origin stands at $410/t CFR Nhava Sheva, up significantly by $25/t w-o-w.

Ferro Alloys

• Indian silico manganese prices increased in the week due to better demand from steel mills. Meanwhile, export prices also increased amid better international demand and discontinuation of the MEIS scheme.
• Indian ferro manganese prices increased amid rising demand and low availability of ferro manganese as the production shortage has hit the market.
• Indian ferro chrome prices remained unchanged owing to low demand and down trending stainless steel prices. Meanwhile, demand from the export market is still lagging forcing the smelters to conclude deals at lower levels in the domestic market.
• Indian ferro silicon prices increased after Bhutanese producers increased their offers as the international market picked up and imports are now much costlier due to surge in freight rates.

Semi Finished

On a weekly basis, domestic billet offers incline by INR 400-1,700/t due to increased buying activities, similarly sponge prices raised by INR 300-900/t in major market except in Raipur & Raigarh (Central India) where offers slightly fall by INR 100/t.

• Indian sponge iron export offers unchanged this week & about 10,000 t deals reported at $370-375/t CPT Benapole, equivalent to $385-390/t CFR Chittagong, Bangladesh.
• Induction grade billet export offers surged by $10/t to $495-500/t exw Durgapur, equivalent to $520-525/t CPT Nepal. A couple of rakes deal reported by Durgapur & Odisha based plants this week.
• Steel grade pig iron prices rose by INR 700-1,600/t with a major rise of INR 1,300-1,600/t in eastern & northern regions, followed by INR 700-1,000/t in central region. Rising scrap & billet prices has influenced pig iron producers to keep prices strong.
• SAIL conducted a pig iron auction from its Rourkela Steel Plant for 7,300 t material on 11 Dec’20 & the entire quantity was booked at a weighted average price of 30,680/t exw.
• SAIL has scheduled an auction for 8,550 t (2,850 t x 3 rakes) of basic grade pig iron on 16 Dec ’20 from its Bokaro Steel Plant, Jharkhand.
• Vedanta Limited has increased 2nd time its offer for foundry grade pig iron by INR 500/t for Dec ’20 to INR 37,200/t DAP Gujarat.
• Steel major SAIL’s pig iron auction for 2,000 t (basic grade) material from ISP, Burnpur on 10 Dec’20 was booked at INR 32,200/t exw.
• SAIL’s pig iron auction from its Bhilai Steel Plant for 10,650 t on 08 Dec’20 was concluded at a weighted average price of INR 32,000/t exw.

Finished Long

India’s finish long steel market of mid-sized mills observed a huge spike in prices in this week as well, and rebar prices move up by INR 600-1,400/t w-o-w in most of the major supplying locations, except Gujarat market where prices increased more than INR 2,000/t due to supportive demand from project segment. As per market participants demand and trade activity is moderate, but consistently strengthening in raw material cost pushes the manufacturers to increase their offers.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 38,900-39,100/t exw Raipur, INR 41,300-41,700/t exw Jalna.
• Trade discount given by Raipur based heavy structure manufacturers stood at INR 500-800/t and the trade price of 200 Angle is at INR 42,100-42,500/t exw.
• Trade discounts in Raipur wire rod are currently at INR 200-300/t and trade reference price stood at INR 40,200-40,300/t exw Raipur, INR 40,800-41,000 exw Durgapur, size 5.5 mm.

Finished Flats

• Indian steel mills have announced a second price hike by around INR 1,500-2,000/t ($20-27) for Dec’20. Mills are offering HRC around INR 49,000-49,400/t and INR 58,250-58,400/t exy Mumbai.
• On the other hand, there is a difference of around INR 2,000/t between the trade price and offers from mills. Prices in the trade segment, HRC (IS2062 2.5-8 mm) stands at INR 50,000-52,000/t and CRC (0.9 mm GR) is around INR INR 59,000-61,000/t exy Mumbai.
• Major steel mills are pushing prices on tight supply since they are working with limited inventories. Mills are supplying only 30% of MoU quantities because of shortage. Traders are rigorously buying the material and trying to hoard the stocks amid a rapid increase in domestic flat steel prices.Thus the shortage and panic sales lead to differences between the prices.

Reference Prices as on 12 Dec’20 (Week 50)
Prices are exw & exclusive of GST

Indian export reference prices as on 12 Dec’20
Prices in $/t
Source: SteelMint Research