Weekly: Indian steel market snapshot

The Indian steel market has observed volatility in prices during week 17. Spot steel demand in domestic segment was subdued which led to price fluctuations in quoted offers through the mid-sized mills.

As per the assessment, domestic sponge iron prices fell by INR 300-1,400/t & billet upto INR 2,000/t with major price drop seen in Western India by INR 1,400-2,000/t and a decline of INR 300-1,000/t was seen in Central, Eastern & Southern India.

In line with this, the rebar market was less supportive during the week as prices fell sharply by INR 1,500-3,000/t in Western regions, while a rise of INR 200-800/t recorded in a few locations on w-o-w basis.

In context to finished flat steel, most of the primary mills have raised prices for the 3rd time in this month on higher prices in exports and domestic demand recovery.

Iron Ore and Pellet

• SAIL conducted an auction on 22nd Apr for 52,000 t iron ore fines from its Dalli mines in Chhattisgarh. After receiving no bids due to lower grade offered, SAIL relaunched the auction, according to market sources report to SteelMint. The material put to auction was of grade ranging from Fe 58.10% and Fe 56.33%. Out of 52,000 t offered, bids fetched were for 12,000t at INR 2,750-2,900/t inclusive of Royalty, DMF & NMET.
• NMDC has produced more than 26 mn t of iron ore from its two mechanised mining complexes – Bacheli and Kirandul – at the Bailadila mines in Chhattisgarh, SteelMint learnt from a recent company update.
• NMDC is going to conduct two iron ore auctions for around 180,600 t from its Bacheli mines and 50,400 t from Kirandul mines, Chhattisgarh. Out of the offered quantity, 16,800t is DR-CLO and 163,800t is fines. Both the auctions are scheduled for 30 Apr ’21.
• SteelMint’s bi-weekly domestic pellet index “PELLEX ” remained stable at INR 14,550/t DAP Raipur in a recent deal.
• SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index increased by $3 to $91/t FOB east coast India.
• SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has moved up further by $8.5/t w-o-w to $204.5/t in the recent deals.

Coal

Australian hard coking coal prices remained steady, with a pair of spot transactions concluded earlier this week for premium coking coals. In China, spot activity was thin due to lack of availability for non-Australian premium coking coals.

• Latest offers for the Premium HCC grade are assessed at around $110.00/t FOB Australia, $223.25/t CNF China and $134.55/t CNF India.
• South African RB2 portside prices this week inched down to INR 6500/t ex-Gangavaram amid limited trades at port.
• South African API4 index remained stable at levels of $93-94/t this week while discounts for RB2 and RB3 were assessed at $16/t and $27/t respectively.

Ferro Alloys

• Indian Silico manganese prices in Raipur fall by INR 2,000-3,000/t to INR 88,000/t, amidst lower cost material available in the market. Meanwhile, offers from Durgapur remained relatively stable at INR 87,500-88,000/t Ex-plant.
• Ferro manganese prices increased in Durgapur owing to better demand from the export market. Meanwhile, in Raipur, the prices remained stable amidst moderate demand. Currently, prices for HC 70% are at INR 87,000/t Ex-Durgapur and INR 86,500/t Ex-Raipur.
• Indian Ferro chrome prices went down as producers are willing to liquidate stocks. Currently, the prices are at around INR 89,000/t. However, amidst falling prices of Chinese ferrochrome, buyers expect the prices in the domestic market to take a plunge.
• Ferro silicon prices increased in India, amidst an acute supply shortage. Bhutanese producers are packed with backlog dispatches, while Northeast Indian producers are facing severe power outages, which has lowered their production. Currently, prices from Bhutan are at INR 107,000/t and Guwahati are at INR 109,000/t. Meanwhile, many traders are also quoting higher for immediate deliveries.

Ferrous Scrap

India’s imported scrap trade has slowed down due to stringent lockdown restrictions that have been implemented in different parts of the country amidst an exponential growth in COVID cases. This has forced many secondary steel producers (alloy & stainless steel producers) to curtail production, SteelMint learnt from its credible sources. International market is up after Turkey-based mills resumed bookings at increased offers. Imported scrap offers to India remained mostly stable w-o-w, however, limited trades were reported.

• Shredded offers in containers remain mostly firm at $460-465/t CFR Nhava Sheva basis
• UAE origin HMS1 offers stand stable from last few weeks at $440/t CFR Nhava Sheva basis, few trades in small quantities have been reported

Semi Finished

On a weekly basis, domestic sponge iron offers fall sharply by INR 300-1,400/t & billet by INR 200-1,900/t across regions. In this period major fall in billet prices reported in Western India (Jalna) by INR 1,900/t.

• About 10,000 t Indian sponge iron export deals concluded this week at around $430-435/t, while the fresh offers drop by $5/t to $425-430/t CPT Benapole, equivalent to $440/t CFR Chittagong, Bangladesh.
• Steel grade pig iron prices fell by INR 100-700/t (w-o-w) across regions & the major fall seen in Eastern & Northern regions by INR 500-700/t due to weak demand on falling furnaces production.
• Induction grade billet export offers stable this week on account of slight fall in domestic price & strong rupee against the US dollar. The current offers are hovering at $550-555/t exw Durgapur (equivalent to $580/t CPT Nepal). However, demand remains weak as buyers waiting for price corrections.
• SAIL conducted an auction for 10,650 t pig iron on 21 Apr ’21 from its Bhilai Steel Plant (BSP). The entire quantity was booked at a weighted average price of INR 39,300/t exw.
• Jindal Steel has resumed offers for steel grade pig iron from its Raigarh based plant & the fresh offers are quoted at INR 39,500/t exw.
• SAIL conducted an auction for 4,900 t of basic grade pig iron on 22 Apr ’21 from its Rourkela Steel Plant, Odisha & the entire quantity was booked at INR 38,600/t exw.

Finish long steel

The markets of finish long steel via induction route, in this week have witnessed a volatility in prices across the major supplying regions of India. Likewise in Northern and few specific markets of Southern region(Chennai) rebar prices increased by INR 200-800/t w-o-w basis, while the same declined by up to INR 1,000/t in many major markets of other regions including Southern region as well. However sharp downfall observed in Mumbai and Jalna market by INR 1,800-3,000/t. These variations in prices because of lockdown restrictions in many cities affected the trade activities and demand in the market majorly in the retail segment, but higher raw material cost pushes the manufacturers to adjust their offers as per their production and requirement in the market.

• Trade reference rebar steel prices of 10-25 mm through midsized mills assessed at INR 46,300-46,500/t exw Raipur, INR 49,600-50,000/t exw Jalna.
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 1,200-1,500/t and trade reference price of 200 mm angle is at INR 48,600-49,000/t exw Raipur.
• Trade discounts in Raipur wire rod stands around INR 1,800-2,000/t and trade reference prices stood at INR 45,000-45,200/t exw Raipur, INR 45,200-45,400/t exw Durgapur, size 5.5 mm.

Finished Flat

Indian HRC and CRC trade prices continue to remain all-time high post announcement of a third price hike by major steel mills for Apr deliveries. SteelMint’s benchmark prices for 2.5 mm thickness HRC stands at INR 64,500-65,500/t and CRC at INR 77,000-78,000/t exy-Mumbai. The prices mentioned are basic and GST extra @18% is applicable.

Factors driving domestic trade prices are mentioned below:

• Major Indian steel manufacturers announced a third price hike by up to INR 1,500-3,000/t at the beginning of this week. Effective prices of HRC id at INR 61,500-62,000/t and CRC at INR 75,000-75,500/t exy-Mumbai.
• Major steel mills are offering HRC exports to UAE at $985-990/t CFR UAE,$950-960/t CFR Vietnam, and $1050/t CFR Europe
• Major Chinese tier -1 steel mills are offering HRC at around $920-930/t FoB, meanwhile Japanese and Korean mills are offering at around $1000/t FoB basis. Thus, imports are not a viable option at the moment for domestic traders

Reference Prices as on 24th Apr’21 (Week 17)

Prices are exw & exclusive of GST

Indian export reference prices as on 24th Apr’21

Prices in $/t
Source: SteelMint Research