Weekly: Indian steel market snapshot

The Indian steel market has observed volatility in prices during week 18. Spot steel demand in the domestic segment remained dull due to pandemic. Also, the production has been affected on account of the oxygen crisis which pushed the furnace owners to offer billet at higher prices.

As per SteelMint’s assessment, domestic sponge iron prices fell by INR 200-1,200/t, however, billet prices have fluctuated by INR 200-1,300/t.In line with this, the rebar market also remained less supportive during the week as volatility in prices was seen in many major markets by INR 100-1,000/t.

In context to finished flat steel, Indian mill owners are expected to increase HRC & CRC prices sharply in the month of May due to healthy export realizations.

The trade participants are expecting prices to find support once lockdown restriction are lifted. In addition, rising prices through the primary mills has made sentiments strong in the secondary market.

Iron Ore and Pellet

• NMDC conducted iron ore e-auctions today for 231,000t iron ore from its Chhattisgarh mines, out of which 180,600 t from its Bacheli mines and 50,400 t from Kirandul mines. According to market sources report to SteelMint, the auction received aggressive response with bids moving up by around INR 280/t in fines, INR 930/t in DR-CLO, INR 300/t in ROM and INR 600/t in lump over the set base price. Tighter availability of high grade ore in Odisha has resulted in increased bids in today’s auction.
• Chowgule Group’s Mandovi pellet has restarted its full-fledged operations at its 1.8 mn t pa plant. The plant has resumed operations after a gap of about nine years after operations had been halted in 2012 after a mining ban was imposed in Goa and Karnataka.
• SteelMint’s bi-weekly domestic pellet index “PELLEX ” continues to remain stable at INR 14,550/t DAP Raipur.
• SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index remained largely stable at $92/t FOB east coast India in the recent deals reported.
• Indian pellet export prices have rallied to all time high as per data maintained with SteelMint since 2012. SteelMint weekly pellet export index (FOB east coast India) for Fe 64% grade has increased by $3.5/t w-o-w to $208/t in the recent deal.

Coal

Australian premium hard coking coal price decreased marginally this week as the spot market continued witnessing limited trading activities with participants awaiting tender result for short-term market direction. The premium grade, in particular, has been edging down progressively on limited deals as buyers waited on the sidelines despite adequate spot supply with May and June laycan cargoes.

• 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 have been inched assessed at INR 6500/t ex-Gangavaram while at ports prices have corrected by INR 150-200/t amid limited inquiries.
• South African API4 index surged this week by $6/t amid disruption in rail line connected to RBCT port. Discounts for RB2 and RB3 were assessed at $17/t and $27/t respectively.

Ferrous Scrap

Global scrap prices have maintained its momentum northwards. Following the global price trends, Indian imported scrap prices too, registered a hike of $10 in recently concluded trades this week. The trade has been witnessed after a gap of a couple of weeks. Containerised shredded scrap deals have been concluded at $470/t CFR Nhava Sheva.

• Offers for Dubai origin HMS 1 in containers are at $450/t CFR.
• HMS from UK is now being offered at $450-455/t CFR levels.

Ferro Alloys

• Silico manganese prices drop down further in Raipur and Durgapur owing to lower demand in the domestic market. Currently, prices are at INR 87,000/t Ex-Durgapur and INR 86,500-87,000/t Ex-Raipur.
• Ferro manganese prices increased marginally in Durgapur amidst bullish export market sentiments, while remaining stable in Raipur. Meanwhile, there are only a handful of ferro manganese producers active in the domestic market. Currently, prices are at INR 87,000 – 87,500/t Ex-Durgapur and INR 86,000/t Ex-Raipur.
• Indian ferro chrome prices fell to INR 85,000/t after Chinese tender prices fell. Meanwhile, buyers are insisting on lower prices but the producers are unwilling to lower the prices due to high chrome ore prices and additional electricity tariffs in Odisha in the new fiscal year. However, pessimistic sentiments rule the market.
• Ferro silicon prices increased as producers are overbooked and there is an acute supply shortage in the market amid lockdowns and load shedding. Currently, prices are at INR 112,000/t Ex-Bhutan and INR 120,250/t Ex-Guwahati.

Semi Finished

On a weekly basis, domestic sponge iron offers fall sharply by INR 200-1,200/t across regions & the major fall in prices reported in Eastern India (Durgapur) by INR 1,200/t. Whereas billet market observed volatility in prices by INR 200-1,300/t on fluctuating demand.

• One of the major pig iron producers and suppliers in India, has recently concluded an export tender for around 30,000-40,000 t for May’21 shipment at around $530-535/t FoB India levels (equivalent to $560-565/t CFR China).
• SAIL has scheduled an auction on 03 May’21 for 10,650 t steel grade pig iron from its Bhilai Steel Plant, Chhattisgarh.
• SAIL conducted an auction for 8,700 t of basic grade pig iron on 30 Apr ’21 from its Rourkela Steel Plant, Odisha & the entire quantity was booked at INR 37,450/t exw.
• Vizag Steel has floated export tenders for 80,000 t billets and blooms of sizes- 65*65 mm, 90*90 mm, 150*150 mm, and 200*200 mm. The tender due dates are 03 May ’21 (for 150*150 mm and 200*200 mm) and 05 May ’21 (for 65*65 mm and 90*90 mm).
• Indian sponge iron export offers firm this week at around $425-430/t CPT Benapole, equivalent to $440-445/t CFR Chittagong, Bangladesh. However no major deals as buyers have sufficient stock.
• Steel grade pig iron prices plunge by INR 200-1,100/t (w-o-w) across regions & the major fall seen in Eastern & Northern regions by INR 1,000-1,100/t due to weak demand on falling furnaces production.
• Induction grade billet export offers surge this week by $20-25/t to $570-575/t exw Durgapur (equivalent to $595-600/t CPT Nepal). However, demand remains limited as buyers hold bookings on higher offers amidst lockdown restrictions in Nepal.

Finished Long

The markets of finish long steel via induction route, consecutively on the second week have witnessed a volatility in prices by INR 100-1,000/t w-o-w basis across all over the major supplying regions in India, SteelMint assessment shows. Lockdown restrictions, production cut by mills due to shortage of Oxygen supply to industries and fluctuations in billet prices, all these factors together pushed the manufacturers to adjust their rebar steel prices as per the requirement in the market.

• Trade reference rebar steel prices of 10-25 mm through midsized mills assessed at INR 45,800-46,100/t exw Raipur, INR 49,500-49,900/t exw Jalna.
• Trade discount given by Raipur based heavy structural steel manufacturers is around INR 1,500/t and trade reference price of 200 mm angle is at INR 48,500-48,900/t exw Raipur.
• Trade discounts in Raipur wire rod stands at INR 900-1,000/t and trade reference prices at INR 45,000-45,100/t exw Raipur & INR 46,800-46,900/t exw Durgapur, size 5.5 mm.

Finished Flat

Indian steelmakers are likely to increase HRC and CRC prices in May on the backdrop of higher export realizations in the domestic market. After gaining momentum over the last few months Indian HRC and CRC trade prices are recorded at an all-time high.
SteelMint’s benchmark prices for 2.5 mm thickness HRC stands at INR 65,000-66,000/t and CRC at INR 79,500-80,500/t exy Mumbai. The prices mentioned are basic and GST extra @18% is applicable.

Factors driving Indian steel prices are mentioned below:

• Indian HRC export offers to Vietnam are at $970/t CFR, for the Middle East at $980-985/t CFR, and for Europe at $1050/t CFR for June shipments.
• Oxygen supply will not affect steel production of major steel mills.
• Towards the end of last week, Odisha’s Essel Mining increased the offer by INR 800/t further in the lump and INR 700/t fines. Apart from them, other miners like JSW Steel & Serajuddin mines have also announced a price hike in lumps this week.

Reference prices as on 1st May’21 (Week 18)
Prices are exw & exclusive of GST

Indian export reference prices as on 1st May’21
Prices in $/t
Source: SteelMint Research