Weekly: Indian steel market snapshot

The Indian steel prices have observed an uptrend during week 14 on account of improved trades.

As per SteelMint’s assessment, Indian semi-finished steel prices (including sponge iron & billet) rose by INR 1,700-3,300/t across the regions. Also, rebar offers increased during this week by INR 1,000-2,500/t on account of active demand and a constant surge in raw material prices.

In addition to this, the finished flat steel market has seen a boost in prices as major Indian steel mills are expected to announce a sharp price hike for Apr’21 deliveries on account of higher export realization and strong end-user demand.

Iron Ore and Pellet

• Odisha Mining Corporation in its auction on 31st Mar ’21 for 1.13 mn t iron ore lumps active participation and bids fetched were higher by up to INR 1,600/t over the set base price.
• Odisha’s Essel Mining increased iron ore lump offers by INR 1,200/t and fines by INR 725/t. Lump offers of Essel Mining have hit a record high according to the data maintained with SteelMint.
• NMDC recorded total iron ore production of 34.11 mn t in FY ’21, up by 8% y-o-y. The iron ore sales also increased 6% to 33.27 mn t, as compared with 31.51 mn t in FY ’20, according to company’s recent BSE filing.
• NMDC has announced a sharp price hike for Apr ’21, SteelMint learned from credible sources. The price of DR CLO (Fe 67%) has been increased by INR 580/t, Baila lump by INR 500/t and that of fines by INR 250/t.
• In the 25th Goa iron ore e-auction held on 24th Mar ’21, about 1 mn t (70% of total) iron ore was booked out of the total 1.62 mn t put to auction. The purchase was hampered due to low grade of iron ore put to auction and weak demand in China on recently announced production cuts.
• SteelMint’s bi-weekly domestic pellet index “PELLEX ” has increased sharply by INR 600/t to INR 13,400/t DAP Raipur in a recent deals and hike in offers.
• SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index has moved up sharply by $8/t to $90/t FOB east coast India.
• SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has increased by $2/t w-o-w to $182/t.

Coal

• Australian premium hard coking coal prices continued its downtrend amid ample availability in the ex-China market on lower price indications and relatively fewer bids.
• Latest offers for the Premium HCC grade are assessed at around $112.50/t FOB Australia, $216.00/t CNF China and $133.15/t CNF India.
• South African RB2 portside prices at Gangavaram port increased to ₹7,100/t this week but trading activities turned sparse as majority sellers sold off their stock in last two weeks, post Adani Port’s acqusition of majority stake in Gangavaram port.
• The API4 index the levels of $97/t with discounts being heard at $14/t for RB2 and $25/t for RB3.

Ferrous Scrap

Indian scrap market has observed few trade activities after market resumed post-Holi holidays early this week. Offers followed the global price uptrend and moved up by $25-30/t w-o-w. Buyers were actively preferring the UAE origin HMS scrap over other origins. However, imported shredded scrap trades in India remained silent owing to aggressive buying from Pakistan-based mills at increased offers.

• Trades for UAE origin HMS 1 and HMS were reported at $430/t & $425/t CFR Nhava Sheva respectively.
• A prominent scrap buyer has booked 2,500 t of busheling bundle scrap from Malaysia this week at $485/t CFR Vizag basis

Ferro Alloys

• Silico Manganese prices remained firm as the buyers accepted higher prices with a limited quantity available in the domestic market. Currently, prices are at INR 89,000-90,000/t exw Durgapur and INR 91,000/t exw Raipur, while few producers are also offering at higher levels.
• Ferro Manganese prices increased marginally in Durgapur amidst bullish market sentiments. Meanwhile, there are only a handful of ferro manganese producers active in the domestic market. Currently, prices are at INR 84,000 – 85,000/t exw Durgapur and INR 85,000/t exw Raipur.
• Indian ferro chrome prices stumbled to INR 95,500/t after the release of Chinese tender prices. Meanwhile, buyers are insisting on lower prices but the producers are unwilling to lower the prices due to higher production cost amidst soaring chrome ore prices and additional electricity tariffs in Odisha in the new fiscal year.
• Ferro silicon prices remained stable as producers are overbooked and have no selling pressure. Currently, prices are at INR 100,000/t Ex-Bhutan and INR 101,000/t exw 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 1,700-2,400/t in major locations. Similarly, billet prices also inclined by INR 1,200-3,300/t across India with a major increase of INR 3,000-3,300/t in Goa & Chennai.

• Induction grade billet export offers surged by $25/t to $570/t exw Durgapur (equivalent to $595/t CPT Nepal). However, demand was a little bit weak on account of sharp gain in prices.
• Indian sponge iron export offers increased this week by $25-30/t following surge in domestic offers and around 20,000 t deals reported, while current offers hovering at $430/t CPT Benapole, equivalent to $445-450/t CFR Chittagong, Bangladesh.
• Steel grade pig iron prices increased by INR 1,000-3,000/t (w-o-w) across regions on account of active demand along with surge in billet prices.
• Steel Authority of India Ltd has scheduled an auction on 05 Apr’21 for 9,200 t steel grade pig iron (in 92 units) from its Rourkela Steel Plant, Odisha.
• Vedanta Limited has raised its foundry grade pig iron offer by INR 2,000/t to INR 44,000-44,500/t FoR Ahmedabad, effective from 01 Apr ’21, SteelMint gathered from sources.
• SAIL has scheduled an auction on 05 Apr ’21 for 3,600 t (52 & 60 kg-full length) commercial rails from its Bhilai Steel Plant, Chhattisgarh.

Finished Long

India’s finish long steel market via induction route, in this week witnessed a northward price trend across the regions. Rebar steel prices marked an uptick by INR 1,000-2,000/t w-o-w basis in most of the major markets, while in a few specific markets of Western and Southern regions prices have increased by upto INR 2,500/t. Surging in the cost of raw material and adequate transactions of rebar in the spot trade market are considerable factors behind the rally in finish long steel prices.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 45,000-45,300/t exw Raipur, INR 48,300-48,700/t exw Jalna.
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 900-1,200/t and trade reference price of 200 mm angle is at INR 48,300-48,700/t exw Raipur.
• Trade discounts in Raipur wire rod are currently at INR 1,000-1,300/t and trade reference prices stood at INR 45,200-45,500/t exw Raipur & INR 45,800-46,000/t exw Durgapur, size 5.5 mm.

Finished Flat

Domestic steel trade prices are expected to remain elevated as major Indian steel mills are planning to increase the prices from April 2021 onwards on account of higher export realization, strong demand recovery from end-user industry and absence of imports in the foreseeable future. As of week fourteen of CY 2021, SteelMint’s benchmark prices for 2.5 mm thickness HRC is in the range of INR 58,000-59,000/t exy – Mumbai up by around INR 3,000/t w-o-w basis.

Factors driving domestic HRC prices:

• Higher HRC export offers- Indian steelmakers have raised their HRC export offers to around $840-845/t CFR Vietnam. Higher HRC export offers on bullish market trends along with an increased preference of Vietnam re-rollers for Indian origin HRC over China have supported the price hike.
• Healthy demand from pipes and tubes sector- APL Apollo Tubes Limited (APL Apollo), India’s leading branded structural steel tube company, registered a sales volume of 435,348 ton in Q4 FY ’21, up 9% y-o-y.
• Strong demand from auto sector- India’s largest auto manufacturer, Maruti Suzuki India Limited posted total sales of 167,014 units in Mar ’21, the domestic sales in Mar ’21 have recovered to Mar ’19 levels. Tata Motors Limited Q4 FY ’21 sales stood at 191,720 vehicles, compared to 101,420 units during Q4 FY ’20.

Near term outlook- Firm demand, higher realisations and lower risk of cheap imports from China are likely to accrue benefits for Indian manufacturers and drive the domestic prices in the foreseeable future.

Reference Prices as on 3rd Apr’21 (Week 14)
Prices are exw & exclusive of GST

Indian export reference prices as on 3rd Apr’21
Prices in $/t
Source: SteelMint Research