Weekly: Indian steel market snapshot

Indian steel market has observed a sharp rebound in prices towards weekend during week 13 on improved trades.

As per SteelMint’s assessment, Indian semi finished offers (sponge iron & billet) rose by INR 200-1,200/t across the major markets with a major increase of INR 1,000-1,200/t in billet for Jalna, Mumbai & Hyderabad locations.

In addition to this, rebar market has noticed volatility in prices by INR 100-200/t w-o-w specifically in Northern & Eastern regions, however in other regions prices have witnessed an uptick by up to INR 800/t.

Also, finished flat manufacturers are planning to raise prices up to INR 3,000/t ($41), following bullish trends in the global HRC market.

Iron Ore and Pellet

• OMC has scheduled its next iron ore e-auction on 31st Mar’21. The auction is being conducted for 1.13 mn t iron ore lumps. The miner has raised base price upto INR 550/t ($8) against its last auction held on early Feb’21.
• SAIL conducted an auction from its Dalli and Rajhara mines in Chhattisgarh on 26th Mar, for 52,000 t iron ore fines. Out of the total quantity offered, 4,000 t Dalli iron ore fines (Fe 58.10%) received bids at INR 1,900/t, and the rest 40,000 t iron ore fines (Fe 58.41-60.26% grade) from Rajhara received bids at INR 3,350- 2,290/t exw (inclusive of Royalty). However, another iron ore fines auction scheduled on 26th Mar from Barsua (Odisha) has been deferred to 8th Apr’21 owing to less participation, SteelMint learned.
• JSW Steel’s new 8 mn t pellet plant at its Vijayanagar works is likely to start production from March-end, a source informed.
• SteelMint’s bi-weekly domestic pellet index “PELLEX ” has moved down marginally by INR 50/t to INR 12,050/t DAP Raipur.
• SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has decreased marginally by $1/t w-o-w to $180/t.

Coal

Australian premium hard coking coal prices have been edging down progressively on limited deals as buyers wait on the sidelines despite adequate availability, while semi soft and PCI prices are rising amid supply concerns due to the floods in eastern Australia.

• Latest offers for the Premium HCC grade are assessed at around $111.50/t FOB Australia, $216.50/t CNF China and $135.80/t CNF India.
• South African RB2 grade coal portside prices shoot up by INR 600/t to INR 6,800/t ex-Gangavaram this week amid growing supply concerns due to rail issues at Transnet. Towards the week’s end, RB2 offers at Gangavaram saw a correction of INR 100/t as buyers resist raised RB2 prices.

Ferrous Scrap

Imported scrap market in India remained quiet this week after few trades were reported last week. Imported scrap offers mostly remain unchanged w-o-w. Market uncertainties due to freight rates, Suez Canal blockage, upcoming Holi festival, and financial year-end remained the major factors that kept buyers away from the market, SteelMint understands. Shipping lines have stopped booking containers from UK/EU, because of the Suez Canel problem.

• Offers from UK/EU for imported shredded scrap are being quoted at $430-435/t CFR Nhava Sheva, stable w-o-w.
• UK, UAE and Australia origin HMS 1&2 (80:20) is now being offered at $400-410/t CFR levels. Few trades of UAE origin HMS were heard around $405-410/t CFR.

Ferro Alloys

• Silico Manganese prices remained largely stable as the buyers accept the higher prices but the demand shrank before the financial year-end. It is expected that a new round of inquiries will come back from next week. Currently, prices are at INR 88,000-89,000/t both in Raipur and Durgapur, while few producers are offering at higher levels.
• Ferro Manganese prices increased marginally in Durgapur amidst bullish market sentiments. Meanwhile, there is only a handful of ferromanganese producers active in the domestic market. Currently, prices are at INR 84,000/t both in Raipur and Durgapur.
• Indian ferrochrome prices remained dropped to INR 96,000/t, after FACOR ferrochrome auction, receives no bids and the market was turned upside down. Meanwhile, buyers are waiting for the upcoming Chinese ferrochrome tenders as they expected the prices to fall and the domestic market to soften further.
• Ferrosilicon prices remained stable, as producers are overbooked and have low selling pressure. Currently, prices are at INR 100,000/t Ex-Bhutan and INR 101,000/t Ex-Guwahati. However, few producers in Meghalaya are offering at higher levels as well.

Semi Finished

On a weekly basis, domestic sponge iron offers rise by INR 200-1,000/t in major locations. Similarly, billet prices also inclined by INR 200-1,200/t across India with a major increase of INR 1,000-1,200/t in Jalna, Mumbai & Hyderabad.

• An Indian state-owned mill reported having concluded its billet (125*125mm) and bloom (200*280 mm) export tenders, floated for 32,400 t (16,200 t each) at around $555/t, FoB India for both the tenders.
• Ramgarh (Jharkhand) based Brahmaputra Metallics Limited has kept billet price unchanged at INR 39,200/t exw.
• Induction grade billet export offers up by around $20/t to $550/t exw Durgapur (equivalent to $575/t CPT Nepal). As per exporters, demand remains average basis as prices are strengthened.
• Indian sponge iron export offers increased by $10/t due to domestic gain & improved demand. The fresh offers hovering at $420-425/t CFR Chittagong, Bangladesh, meanwhile, around 12,000 t deals confirmed in the mid of week at around $410-415/t CFR.
• Steel grade pig iron prices remain volatile by INR 100-400/t (w-o-w) across regions on account of moderate supply-demand.

Finished Long

India’s finish long steel market via induction route, in this week observed volatility in prices by INR 100-200/t w-o-w specifically in North and in a few markets of Eastern regions, while in major markets of other regions the rebar prices have witnessed an uptick by up to INR 800/t.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 43,100-43,500/t exw Raipur, INR 46,900-47,300/t exw Jalna.
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 700-1,000/t and trade reference price of 200 mm Angle is stood at INR 45,900-46,300/t exw Raipur.
• Trade discounts in Raipur wire rod are currently at INR 500-700/t and trade reference prices stood at INR 43,800-44,000/t exw Raipur, INR 43,200-43,500/t exw Durgapur, size 5.5 mm.

Major Indian steel manufacturers are planning to raise flat steel prices by up to INR 2,000-3,000/t ($27-41) following bullish trends in the global HRC market. Meanwhile traders have already raised the local prices ahead of official price announcements by major steel mills. SteelMint’s benchmark prices for 2.5 mm thickness HRC are in the range of INR 55,000-56,000/t exy Mumbai up by around INR 1,500/t w-o-w basis.

Why are steel prices holding strong in India?

• Higher realization in the export market- Indian mills have sharply raised HRC export offers for Vietnam by around $20-25/t w-o-w. Recent offers to Vietnam stood at $810-815/t CFR and to Europe at $900/t CFR for May shipments, sources have reported to SteelMint.Thus, higher realizations in exports are motivating mills to raise prices in the domestic market.
• Imports are not viable- Major Chinese steel mills are offering HRC at around $765-770/t FoB, meanwhile Japanese and Korean mills are offering at around $790-800/t FoB basis. Thus, imports are not a viable option at the moment for domestic traders.
• Strong Demand from end-user industry-End user industries are pushing for record production to make up Maruti Suzuki, India’s biggest carmaker, plans to maintain a daily production run rate of more than 6,700 vehicles, which will take its total tally for FY ’22 to 2.4 million vehicles, the most in its nearly four decades of operations.

Reference Prices as on 27th Mar’21 (Week 13)

Prices are exw & exclusive of GST

Indian export reference prices as on 27th Mar’21
Prices in $/t
Source: SteelMint Research