Weekly: Indian steel market snapshot

India’s secondary steel market has noticed mixed sentiments during the 2nd week of 2021 due to subdued demand.

As per the SteelMint’s assessment, sponge iron and billet offers fluctuated by INR 100-700/t across markets. Meanwhile in finished steel – rebar prices of induction grade remained volatile in overall regions, however prices dropped by INR 1,500/t in northern India due to lack of demand, whereas a hike of INR 700-1,000/t was seen in the central and southern markets.

Trade sources are assuming further volatility in prices on account of moderate demand in the domestic market amidst improved availability of sponge iron in major locations of central & eastern India.

However, market sentiments in finished flat steel remained robust with mills announcing price hike by INR 2,000-5,000/t for Jan’21. Few Indian primary mills announced 2nd price hike in longs for Jan’21.

Iron Ore and Pellets

The Jilling-Langalota and Guali iron ore mines in Odisha have been allocated to Odisha Mineral Development Corporation (OMC) by the state govt.

Odisha govt is likely to issue notice inviting tenders for auction of six iron ore blocks by the end of Jan’21, said Mr UC Jena Joint Director of Mines in a recent webinar organized by SteelMint.

• In OMC, iron ore e-auction held on 07th Jan’21 for 851,100 t iron ore fines, the miner received an overwhelming response with the entire quantity getting booked and bids increasing by up to INR 1,300/t over the set base price.
• NMDC has raised prices for Jan’21. The price of lump and fines have increased by INR 500/t and INR 200/t recpectively and DR-CLO increased by INR 580/t ($8).
• SAIL Authority of India Ltd (SAIL) conducted auction from its Barsua, Bolani and Taldih mines from Odisha for 256,000 iron ore fines for different grade, out of that around 232,000 t got concluded this week.
• SteelMint’s bi-weekly domestic pellet index “PELLEX” increased by INR 150/t to INR 12,350/t DAP Raipur
• SteelMint’s weekly pellet export index (FOB east coast India) stands at $187/t, up by $6/t w-o-w following decline in Chinese port inventory and improved demand from Chinese mills. One of the major pellet makers in eastern India concluded a deal for one shipment of pellets (Fe 63%) at $192/t CFR China for mid-Jan laycan.

Coal

• FoB prices for Australian coking coal have continued to maintain their same levels in past six weeks, because of a demand slowdown since before the year-end break as supply continued to outweigh demand.
• Asian markets outside China witnessed a rather slow start to this year’s first trading week as end-users showed little urgency to book cargoes, leaving spot prices unchanged.
• Alongside limited spot demand from end-users in Europe, North Asia and India, Chinese traders have been looking for reselling opportunities, thereby aggravating concerns of excess supply of Australia-originated premium coking coal.
• Presently there are no fundamental changes in the Indian market for seaborne coking coal, with relatively stable demand.
• Moreover, Indian steel markets had been performing reasonably well and some Indian buyers are keen to conclude spot deals.
• Latest offers for the Premium HCC grade are assessed at around $102.00/t FOB Australia, $214.00/t CNF China and $115.90/t CNF India.

Ferrous Scrap

• India’s imported scrap market remained quiet for another week. Market insiders are expecting that from next week onwards market would see some trading activities as buyers had delayed their buying for the last few weeks, in the anticipation of price correction.
• Indian market is waiting for upcoming budget 2021-22, which is likely to be presented on 1st Feb’21 and is expected to be more encouraging to manufacturing, infrastructure, and steel industry.
• Current offers for UK/EU origin shredded are at $480-490/t CFR levels, however, no firm buying interest was heard at these levels.
• SteelMint’s assessment for Shredded scrap in containers of UK/EU origin stands at $483/t CFR Nhava Sheva, moving up by $5 w-o-w.

Ferro Alloys

• Indian silico manganese prices increased by INR 3,000/t w-o-w due to the improved steel prices. Meanwhile, short supply in the spot market and rising manganese ore prices might push the prices to further high.
• Ferro manganese prices remained stable but high, due to moderate demand in the domestic market. However, due to increased manganese ore prices, the prices might increase higher than the current levels.
• Ferro chrome prices increased by INR 2,000/t after continuous decline owing to supply shortages. Since most of the producers were low on the chrome ore inventory, the production levels of ferro chrome decreased and the supplies were adversely affected. Meanwhile, demand from China is high, which is also boosting the sentiments of Indian ferro chrome producers.
• Indian ferro silicon prices remained stable due to low to moderate demand in the domestic market. However, increasing international prices and no imports have enhanced the sentiments of Indian producers to keep the prices high.

Semi Finished

On weekly basis, Indian semi finished (Billet) steel market observed volatility in prices by INR 100-700/t due to moderate demand. Similarly, sponge iron offers fluctuated by INR 100-500/t w-o-w.

• Induction grade billet export offers to Nepal are assessed at $543-545/t, however few deals reported $540-542/t; exw Durgapur (equivalent to 575/t CPT Nepal), via road delivery.
• Indian sponge iron export demand remained active on a firm price range & deals of 6,000-8,000 t reported at $400-405/t CPT Benapole (equivalent to $415-420/t CFR Chittagong, Bangladesh).
• Steel grade pig iron prices surged by INR 500-700/t in major locations, except in Durgapur & Rourkela where it declined by INR 300-500/t on account of improved supply as well limited transactions.
• Tata Metaliks Ltd has raised the basic (steel) grade pig iron price by INR 600/t to INR 37,400/t ($510) exw Kharagpur, eastern India.
• SAIL has scheduled an auction for 8,550 t (2,850 t x 3 rakes) of basic grade pig iron on 13 Jan ’21 from its Bokaro Steel Plant, Jharkhand.
• SAIL conducted a pig iron auction from its Rourkela Steel Plant for 7,100 t material on 8 Jan’21 & the entire quantity was booked at a weighted average price of 35,100/t exw.

Finished Long

India’s finish long steel market observed mixed trend this week in the overall regions. In few specified locations of the northern region, due to lack of demand, the induction grade rebar prices were down around INR 1,500/t w-o-w basis, while in the central and southern regions prices have increased by INR 700-1,000/t owing to match up the price gap with other competitive markets. However in rest of the other major supplying locations manufacturers hold their offers and adjusted trade discount by INR 200-500/t depending upon the requirement in the market.

• Mid scale mills wire rod export offers drop sharply by $10-15/t compared with beginning of weak on account of measured demand & current offers stood at $630-635/t exw Durgapur, equivalent to $655-660/t CPT Nepal.
• Trade reference rebar prices of 10-25 mm through induction mills assessed at INR 44,600-45,000/t exw Raipur & INR 48,900-49,200/t exw Jalna.
• Trade discounts through the Raipur based heavy structure manufacturers stood at INR 1,000-1,300/t and the trade reference price of 200 mm Angle is at INR 46,700-47,100/t exw.
• Trade discounts in Raipur wire rod are currently at INR 1,000-1,200/t and trade reference prices stood at INR 45,400-45,800/t exw Raipur, INR 46,200-46,500 exw Durgapur, size 5.5 mm.

Finished Flat

Major Indian steel mills have announced a substantial increase in flat steel prices by around INR 2,000-5,000/t in Jan’21.

Effective exy Mumbai prices by major steel mills:

• JSW Steel is offering HRC at INR 53,500-54,000/t and CRC at INR 64,000-64,500/t.
• SAIL is offering HRC at INR 55,000-55,250/t and CRC at INR 64,000-64,500/t.
• Tata Steel is offering HRC at INR 55,000-55,500/t and CRC at 66,000-66,750/t.
• AM/NS India is offering HRC at INR 54,700-54,800/t and CRC at INR 64,700-64,900/t

Prices in the trade segment- As per SteelMint’s benchmark price assessment, domestic HRC prices stand at INR 58,000-58,500/t and CRC prices at INR 68,000-69,000/t exy Mumbai.

Reference Prices as on 9 Jan’21 (Week 2)
Prices are exw & exclusive of GST

Indian export reference prices as on 9 Jan’21
Prices in $/t
Source: SteelMint Research