Weekly: Indian steel market snapshot

Indian steel market has observed volatility in prices during week 12. Demand was moderate during these days which led to price fluctuations on floated offers through the mid sized mills.

As per assessment, domestic sponge iron prices dropped by INR 200-700/t in major locations, However, billet prices have increased in East India by INR 100-650/t though a downfall of INR 300-1,000/t seen in Central, Western & southern India.

In line with this, rebar market was less supportive during the week as prices plunged by INR 100-1,000/t w-o-w, except few locations in North and Eastern regions where prices slightly increased by up to INR 400/t.

In context to finished flat steel, most of the mill owners are planning to raise prices on higher prices in exports and domestic demand recovery.

Iron Ore and Pellet

• Odisha’s Essel Mining has increased iron ore lump (5-18 mm, Fe 62%) offers by INR 500/t to INR 8,100/t (ex-mines, including Royalty, DMF & NMET). However, fines offer are remained unchanged – Sources.
• SAIL conducted an auction on 19th Mar’21 for 172,000 t iron ore fines from its Dalli mines in Chhattisgarh. Out of the total quantity offered, only 8,000 t (Fe 55.41 & 56.33%) received bids at INR 500-600/t (loaded, including Royalty). Lots with lower iron ore content failed to fetch bids.
• NMDC conducted iron ore e-auctions on 19th Mar’21 for 701,400t iron ore from its Chhattisgarh mines. Offered quantity comprised of 600,600 t of fines, 50,400 t DR-CLO and rest comprised of lump and ROM. The DR-CLO lots received a good response with the entire quantity booked and bids increased by around INR 1,100/t over the set base price of INR 5,965/t, as it is still cost-effective than other substitutes. Bids for lump moved up by around INR 300 over the set base price of INR 5,139/t, SteelMint learned. However, the fines lot fetched a weak response as only 58,000t was booked.
• SteelMint’s bi-weekly domestic pellet index “PELLEX” moved down by INR 50/t to INR 12,100/t, DAP Raipur in recent deals.
• Barbil (Odisha) based pellet makers have raised Fe 63% grade pellet offers by INR 300-400/t to INR 11,400-11,800/t (loaded to the wagons).
• SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has increased by $4/t w-o-w to $181/t.

Coal

Australian coking coal prices inched down further this week, with most market participants adopting a wait-and-see attitude amid the recent price volatility seen in the FOB market for premium coking coal. The spot market saw relatively fewer bids and offers in the ex-China market for Australian premium low-volatile (PLV) hard coking coal (HCC), but buyers stayed out of the market.

• Present outlook for spot buying interest from India appears bleak, as most end users are seemingly well stocked for now until May or June as they booked cargoes when PLV HCC FOB prices were at $100-105/t in early January.
• Latest offers for the Premium HCC grade are assessed at around $112.50/t FOB Australia, $217.00/t CNF China and $140.55/t CNF India.
• South African RB2 grade coal portside prices shoot up by INR 600/t to INR 6,200/t ex-Gangavaram this week amid esclation in API4 index that has moved up by $4/t w-o-w basis to $93.6/t by Friday. Majority sellers have raised their offers and are holding stock in anticipation of further rise in API4 index due to Transnet’s rail issues.

Ferrous Scrap

Indian scrap market has witnessed a marginal improvement in imported scrap trades during the past one week. Prices have dropped significantly on a weekly basis. Moreover, now suppliers are holding back offers and waiting for the market to stabilize, SteelMint learnt.

• Trades of 3,000 t of Dubai origin HMS 1&2 (80:20) was concluded at $385-390/t CFR basis. Few lots of HMS were booked by Chennai-based mills.
• Containerised shredded of UK/US origin stands at $435/t CFR Nhava Sheva level, down by $10/t w-o-w.
• HMS 1&2 (80:20) from Middle-East is now being offered at $385-395/t CFR level, decreasing considerably by $20-30/t w-o-w.
• Indian Union Minister- Nitin Gadkari has announced a voluntary vehicle scrappage policy on 18th Mar in Lok Sabha.

Ferro Alloys

• Silico Manganese prices escalated to more than a decade-high owing to increased supply shrinkage in the domestic market. Many producers are now booked for May and are offering only June deliveries for exports.
• Ferro Manganese prices increased amidst bullish steel market sentiments. Meanwhile, there is only a handful of ferromanganese producers active in the domestic market.
• Indian ferrochrome prices remained stable w-o-w, amidst slow buying interest from the domestic buyers. Meanwhile, exports sentiments are weak as buyers are waiting for the next round of Chinese ferrochrome tenders.
• Ferrosilicon prices rebounded in Bhutan as producers are overbooked and have low selling pressure. Meanwhile, producers in Meghalaya are expected to face prolonged power cuts hence, offers from Meghalaya are at around INR 101,000/t exw.

Semi Finished

On a weekly basis, domestic sponge iron offers fall by INR 200-700/t in major locations. Whereas billet market observed volatility in prices on fluctuating demand, prices increase in East India by INR 100-650/t & downfall of INR 300-1,000/t seen in Central, Western & southern India.

• SAIL has scheduled an auction for 5,700 t (2,850 t x 2 rakes) of basic grade pig iron on 22 Mar ’21 from its Bokaro Steel Plant, Jharkhand.
• TATA Metaliks Ltd has concluded a tender for a rake (around 2,200 t) of foundry grade pig iron at around INR 41,800/t FoR Punjab.
• One of the major pig iron producers has recently concluded an export tender for around 40,000 t pig iron for Apr ’21 shipment at around $540-545/t CFR China.
• Vizag Steel has floated an export tender for 60,000 t blooms (150×150 mm. 3SP/4SP) on a 100% advance payment basis for end-Apr’21 shipment. The tender is due on 22 Mar’21.
• Induction grade billet export offers up by $10-15/t to $540-545/t exw Durgapur (equivalent to $565-570/t CPT Nepal). However, demand was slow with midsize mills due to rising prices along with competitive offers of blast furnace grade billets which was sold recently at around $560/t CPT Nepal by a Eastern India based primary mill.
• Indian sponge iron export offers increased by $5/t this week on fresh deals about 8,000-10,000 t at around $410-415/t CFR Chittagong, Bangladesh.
• Steel grade pig iron prices fluctuated by INR 100-400/t (w-o-w) across markets on account of moderate demand-supply & downward price corrections in sponge iron.

Finished Long

India’s finish long steel market via induction route, in this week observed limited buying inquiries in most of the major supplying regions and the rebar prices plunged by INR 100-1,000/t w-o-w, except in few specific markets of North and Eastern region where prices slightly increased by up to INR 400/t.

• Trade reference rebar prices of 12-25 mm through midsized mills assessed at INR 42,300-42,500/t exw Raipur, INR 46,300-46,700/t exw Jalna.
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 1,000-1,300/t and trade reference price of 200 mm Angle is stood at INR 44,600-45,000/t exw Raipur.
• Trade discounts in Raipur wire rod are currently at INR 800-1,000/t and trade reference prices stood at INR 41,800-42,000/t exw Raipur, INR 42,600-43,000/t exw Durgapur, size 5.5 mm.

Finished Flat

Major Indian steel manufacturers are planning to raise flat steel prices by INR 1,000/t in line with higher international prices. Factors that may drive steel prices in the near term:

• Indian steel mills are actively exploring export options on higher price realizations. Recently mills have raised HRC export offers to a $770-780/t CFR basis which was around $760/t CFR basis to Vietnam last week. Meanwhile, mills are eyeing around $800/t CFR UAE and $880/t CFR for Europe.
• Major steel mills have booked decent quantities of HRC for exports in the global market. Due to this mills are facing a shortage of thinner gauge HRC for domestic sales.
• Major exporting nations mainly Japan, China, and South Korea are offering HRC on the higher side. Thus imports are not viable to India at the moment. Thus stockists have to procure the material domestically.

On the other hand, SteelMint’s benchmark prices for 2.5 mm thickness HRC increased by INR 500/t INR 54,000-54,500/t (exy Mumbai) remain moderate against last week.

Reference Prices as on 20th Mar’21 (Week 12)
Prices are exw & exclusive of GST

Indian export reference prices as on 20th Mar’21
Prices in $/t
Source: SteelMint Research