As per SteelMint’s assessment in the 21st week, domestic sponge iron offers fell sharply by INR 500-1,900/t in major locations. Similarly, billet prices also dropped by up to INR 2,500/t across India.
Meanwhile, the rebar market has witnessed limited trade activities due to weak demand., Also, rising stock of finished steel compelled mill owners to reduce rebar prices. Prices have declined by INR 700-2,300/t week-on-week (w-o-w).
In addition, few steel mills announced a second hike in the list prices of hot-rolled coils (HRCs) and cold-rolled coils (CRCs) by INR 1,750-2,000/t so as to reduce the gap between international and domestic pricing.
Iron ore and pellets
- Steel Authority of India Ltd (SAIL) conducted an auction on 19 May’21 for 84,000 tonnes (t) of iron ore fines from its Dalli and Rajhara mines in Chhattisgarh. Of the total allotted quantity, 28,000 t (Fe 60.09%) from Rajhara mine received bids at INR 6,760/t, SteelMint learnt from sources. Another 28,000 t (Fe 55.28%) from Dalli mine received bids at INR 2,700/t (loaded, including royalty, DMF and NMET).
- The Odisha government’s Directorate of Mines declared that captive lessees in the state, who have been granted leases through auction, are not allowed to sell 25% of the material produced in the previous financial year in the merchant market, as per the latest government order accessed by SteelMint.
- SteelMint’s bi-weekly domestic pellet index “PELLEX ” decreased by INR 400/t to INR 16,800/t DAP Raipur.
- SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index moved down by $14/t to $88/t FoB east coast India. Demand for low grade ore turned further weak on stricter pollution control norms in China.
- SteelMint’s Indian pellet export index (Fe 64% 3% Al, FoB east coast) recorded a sharp drop of around $27/t w-o-w and stands at $216/t on uncertain market outlook amid a plunge in Chinese iron ore and steel futures.
Coal
Australian premium hard coking coal prices have continued to surge with fresh bookings concluded this week on the back of increased spot volatility in ex-China markets. Presently, the Indian market outlook for spot buying of imported coking coal is seen as modest because end-users are well stocked with as much as 60 days’ inventory at ports and plants. Furthermore, near-term demand outlook for Australian coking coal from Indian spot buyers appears bleak, given that the resurgent pandemic could well affect India’s steel production.
- Latest offers for the Premium HCC grade are assessed at around $114.00/t FOB Australia, $257.50/t CNF China and $145.20/t CNF India.
- South African RB2 portside prices recorded an average increase of INR 300/t w-o-w and have been assessed at INR 7,400/t ex-Gangavaram this week.
- South African API4 index surged further this week by $3/t w-o-w to $103/t. Discounts for RB2 and RB3 were assessed at $15/t and $25/t respectively.
Ferrous scrap
- SteelMint’s assessment for containerised shredded scrap of UK/Europe-origin stands at $525-530/t CFR Nhava Sheva, up by around $5/t w-o-w.
- UAE-origin HMS 1 is now being quoted at $505/t CFR. Gujarat-based mills remained active in booking Dubai-origin HMS. A deal of 2,000 t of UAE-origin HMS 1&2 (90:10) was heard at $505/t CFR basis, early this week.
- Buyers have adopted a wait-and-watch policy and expect prices to drop by over $20/t because of limited buying and the decline in Chinese steel prices.
Ferro alloys
- Indian silico manganese prices increased w-o-w to around INR 90,000/t both in Raipur and Durgapur for HC 60-14 grade. Producers reported that there is good demand in the exports market which is driving the prices, while major exporters are offering August-September shipments.
- Indian ferro manganese prices increased in line with better demand from exports and higher silico manganese prices are further boosting the sentiments of the smelters. Currently, prices are at around INR 87,000/t ex-Raipur and around INR 89,000/t ex-Durgapur for HC 70% grade.
- Indian ferro chrome prices increased this week to INR 85,500/t amidst supply shortage in the domestic market. Meanwhile, the demand for ferro chrome is high, as buyers panic about availability of the material in the market.
- Indian ferro silicon prices increased further to INR 129,000/t ex-Guwahati after Bhutan’splants started dealing at INR 118,500-119,000/t exw. Meanwhile, the supply and dispatch situation remains affected from both the areas due to lockdowns and truck unavailability.
Semi-finished
Domestic sponge iron offers fell sharply by INR 500-1,900/t in major locations. Billet prices also declined by up to INR 2,500/t across India with a major decrease of INR 2,000-2,300/t seen in central, western and southern markets.
- SAIL floated an export tender for 18,900 t billets (150*150mm, 4SP/5SP) for July ’21 shipments. The tender’s due date is 25 May’21.
- An Indian state-owned steel mill sold 30,000 t blooms (150x150mm, 3SP/4SP) through an export tender in the price range of $655-658/t, FoB.
- Indian sponge iron export offers slightly dropped this week by $5/t to $445-450/t CPT Benapole, equivalent to $465-470/t CFR Chittagong, Bangladesh. About 10,000 t deals have been reported on revised prices.
- Steel grade pig iron prices plunged by up to INR 1,500/t with a major fall of INR 1,000-1,500/t seen in central and eastern regions due to weak demand on sharp price corrections in sponge iron and billets in the domestic market.
- Induction grade billet export offers fell by $25/t to around $570-575/t exw Durgapur (equivalent to $595-600/t CPT Nepal). Demand remained stagnant following curtailed rolling mills production in Nepal due to rising oxygen shortage.
Finished long
India’s finished long steel via the induction furnace (IF) route witnessed a downtrend in terms of prices this week. In most of the major markets, rebar steel prices declined by INR 1,000-2,300/t w-o-w, while in a few specific markets in the western and southern regions, the same dropped by up to INR 700/t, SteelMint’s assessment shows. Corrections in raw material prices as well as weak demand and trade activities in the spot market amidst rising inventories in mills prompted long steel manufacturers to reduce their offers.
- Induction grade rebar steel prices of 10-25 mm size are assessed at INR 45,300-45,700/t exws Raipur, INR 49,500-49,900/t exw Jalna.
- Trade discounts by Raipur-based heavy structural steel mills are at INR 1,000-1,300/t. Trade reference prices of 200 mm angle are at INR 48,700-49,100/t exw Raipur.
- Trade discounts for wire rod in Raipur stand at INR 1,600-1,800/t. Trade reference prices are at INR 45,000-45,300/t exw-Raipur and INR 46,000-46,200/t exw Durgapur for 5.5 mm.
Finished flats
Domestic HRC and CRC prices continued to remain discounted as compared to international rates. Indian mills are aiming to reduce the gap between international and domestic pricing. Thus, few private steel mills announced a second hike in list prices of HRCs and CRCs by INR 1,750-2,000/t. The revised list prices of HRCs stand at INR 67,000-68,000/t and CRCs at INR 82,000-83,000/t.
Factors driving HRC prices
- Mills have shifted their interest to HRC exports, mainly to Vietnam, UAE, and Europe. Indian bulk HRC export shipments in Apr’21, amounting to 3,49,388 t, jumped 74% year-on-year (y-o-y) as compared to 20,000 t seen a year ago, as per data maintained with SteelMint.
- Optimistic demand in Vietnam, UAE, and Europe motivated mills to raise HRC export offers in the global markets. Currently, Indian mills are offering HRC to Vietnam and UAE at around $1,100/t CFR basis for June-July shipments. Few deals were reported to have been booked at $1,070-1,080/t CFR Vietnam.
- Europe’s leading steel manufacturer, ArcelorMittal, is planning to announce a hike in its flat steel prices by Euro 50/t ($61). HRC offers are at Euro 1,150/t. This is the third price hike by the company in May’21.
SteelMint’s benchmark prices for 2.5mm thickness hot-rolled coils (HRCs) stand at INR 65,000-66,000/t exy-Mumbai against INR 66,000-67,000/t last week. The prices mentioned do not include GST @18%. The lockdowns and increased rate of Covid infections impacted domestic demand across auto and consumer durable sectors which led to a fall in consumption in Apr ’21
Near term outlook
Chinese futures are falling sharply due to which mills have reduced their export offers. This may hurt India’s export offers and domestic prices in the near term.
Reference prices as on 22nd May’21 (Week 21)
Prices are exw & exclusive of GST
Indian export reference prices as on 22nd May’21
Prices in $/t
Source: SteelMint Research
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