Weekly: Indian Steel Market Snapshot

Indian secondary steel market turned bearish amid COVID-19 fears. Steel prices fell over dull demand with few key markets suspending operations.

As per SteelMint’s assessment in week-12 (14-21 Mar’20), prices declined by about INR 600-1,200/MT in sponge iron, INR 300-1,700/MT in billet & INR 300-1,200/MT in rebars. While Finished Flat steel prices moderate on weak demand.

IRON ORE and PELLETS

Odisha’s major merchant iron ore miners (Essel, KJS and Kaypee) have also decreased iron ore lump offers (5-18 mm ,Fe 63%) by INR 400- 500/MT at the mid of this week.

— Serajuddin mines had done 2nd Iron ore lump price cut at the beginning of this week. SAIL (Steel Authority of India) iron ore fines e-auction for 100,000 MT each from both Barsua and Bolani mines went unsold, as buyers remain sidelines amid corona outbreak.

— PELLEX down by INR 250/MT to INR 6,350/wmt (DAP Raipur). Raipur based pellet makers decreased offers by around INR 200/MT to INR 6,300/MT ex-plant. Jamshedpur based pellet makers sold around 25,000 MT pellets at INR 5,500-5,600/MT ex-plant, yesterday. Bellary based pellet maker decreased pellet offer by INR 200-300/MT to around 6,600-6,800/MT this week.

— No pellet export deal was concluded in this publishing window. However, SteelMint assessment for Fe 64% grade pellets with 3% Al stands at around USD 114-116/MT, CFR China.

COAL

Australian premium low-volatile (PLV) hard coking coal (HCC) prices gained moderately this week, on the back of fresh deals concluded yesterday to Chinese end-users.

Meanwhile, there were little signs of improvement for buying interest in the Asian spot markets outside China on reduced demand of raw materials from steelmakers in light of the corona virus pandemic. In China, weaker domestic coking coal prices, as demand weakened amid a recovery in supply, coupled with falling met coke pricing have jointly contributed to dampen the appetite for seaborne purchases of coking coal.

Indian demand for coking coal import also remain subdued due to increased domestic availability, as well as uncertainty arising from the rapid spread of the corona virus pandemic.

— Latest offers for the Premium HCC grade are assessed at around USD 162.50/MT FOB Australia, USD 172.75/MT CNF China and USD 171.85/MT CNF India.

FERROUS SCRAP

Trades for imported scrap to India turned quiet in the latter half of this week, on the plunge offers at global level following Turkish prices collapse amid COVID-19 fears. Most buyers were not bidding in spite of sharp fall in offers.

— Assessment for Shredded scrap from USA/Europe now stands at USD 280/MT CFR Nhava Sheva, down by over USD 18/MT W-o-W, while falling by USD 10/MT from earlier this week. No major trades for Shredded scrap to India have been reported at these levels as yet, as the buyers are not reacting to any offers presently.

— UK origin HMS 1&2 (80:20) now reported at around USD 265/MT CFR, while Dubai origin HMS 1 (no ci gi) has dropped to USD 280/MT CFR & HMS 1&2 offers from Dubai ranges between USD 270-275/MT depending on quality. HMS 1&2 from West Africa have now dropped to around USD 255/MT CFR.

FERRO ALLOYS

— Silico Manganese prices fell in both Raipur and Durgapur due to dull demand in the domestic and export market.

— Ferro Manganese prices remained stable amid limited production and moderate demand.

— Prices of Ferro Chrome remained stable despite low demand and limited transactions.

— Indian Ferro Silicon prices fell amidst dull demand in the domestic market.

SEMI FINISHED

Billet offers in major Indian markets declined sharply by INR 300-1,700 (USD 4-23)/MT owing to mis-match trade cycle & slowdown demand as buyers postponed future bookings due to covid-19 fear.

Following the trend, sponge iron manufacturers being pressurized and reduced prices by INR 600-1,200/MT in major regions.

Also pig iron demand has weakened on account of falling steel prices and as per assessment offers moved down by INR 600-1,500/MT, W-o-W.

— Indian sponge iron export offers drop by USD 10-15/MT this week due to falling domestic prices & weakening rupee. Fresh offers learned at USD 255-260/MT CPT Benapole, equivalent to USD 275/MT CFR Chittagong, Bangladesh.

— Mid scale mills export offers to Nepal hit lowest since May’18 and stands at USD 350/MT for Billet & USD 390-395/MT for wire rod ex-mill at Durgapur. Freight cost to Nepal via road is about USD 25/MT CPT Raxaul border.

— Rashtriya Ispat Nigam Limited has invited tender for the export of blooms of quantity 60,000 MT. The offer given by the bidder will remain valid until 30 Mar’20.

— Jindal Steel has reduced steel grade pig iron price by INR 1,300/MT (W-o-W) to INR 25,700/MT ex-Raigarh, Central India.

FINISH LONG

Finish Long Steel market remain disturbed due to COVID-19 fear and most of the associations have decided to halt operation activities in specific regions, this has also impacted supply movement.

Major regions of the country are already disturbed due to transportation issue where they are not getting return booking and industrialists are offering considerable discount to ease selling pressure and rebar prices have been contracted by INR 300-1,200/MT in most of the regions, except Chennai market where marginal change has been notified.

— The trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 30,800-31,100/MT ex-Raipur, INR 35,000-35,300/MT ex-Jalna & INR 34,700-35,100/MT ex-Chennai.

— Raipur based heavy structure manufacturers have maintained trade discount by INR 200-500/MT and trade reference prices at INR 33,300-33,600/MT (200 Angle) ex-work.

— Trade discounts in Raipur wire rod is currently at INR 1,100-1,300/MT and trade reference prices stood at INR 29,000-29,300/MT ex-Raipur and INR 29,500-29,800/MT ex-Durgapur, size 5.5 mm.

FINISH FLAT

This week Indian HRC market remained bearish on concerns of corona-virus disturbing the buying pattern and material logistics in a few key markets. Also, gradual winding up of business activities as precautionary measure led to poor demand and weak purchases among buyers and end-users.

— SteelMint’s current trade reference prices of HRC (2.5-8 mm, IS2062) assessed at INR 38,000-38,500/MT ex-Mumbai, INR 38,000-38,500/MT ex-Delhi, and INR 38,500-40,000/MT ex-Chennai.

— SteelMint’s assessment for trade reference prices of CRC (0.9 mm, IS 513) stands at INR 44,000-45,000/MT ex-Mumbai, INR 42,200-44,500/MT ex-Delhi, and INR 43,500-45,500/MT ex-Chennai.

Prices mentioned above are basic and extra GST@ 18% will be applicable.

Reference Prices as on 21st March 2020 (Week 12)

Prices are Ex-works, Exclusive of GST at 18%

Indian Export Reference Prices as on 21st Mar’20

Prices in USD/MT
Source: SteelMint Research