India: Stainless steel prices majorly stable w-o-w; imported scrap prices up amid rise in freight rates

• Finished stainless steel prices maintain stability amid weak demand
  
  
• Imported scrap prices gain on rising freight rates from SE Asia
  
  
• India's stainless steel scrap imports stagnant m-o-m in May'24
  
  

In India, finished stainless steel prices have remained largely stable this week on marginal decline in LME nickel prices and weak buying interest. Imported scrap prices witnessed marginal uptick this week amid increasing freight rates. Meanwhile, domestic scrap prices maintained stability.

India's stainless steel (304 series) HRC prices stood at INR 178,000/t ex-Mumbai and domestic 304-grade scrap, at INR 118,500/t ex-works Delhi, BigMint's assessment revealed.

At the time of reporting, nickel prices on the LME saw a marginal drop by $165/t w-o-w. Nickel prices for 3-month delivery on LME fell by 1%, to $17,160/t, which was previously hovering at around $17,325/t levels. Meanwhile, nickel stocks on LME stood at 92,010 t.

Scrap market

In the local market, prices of 304 scrap were assessed at INR 118,000-119,000/t ex-Delhi NCR, with cash payment terms. Sources indicated that key mills are acquiring 304 scrap at around INR 120,000-122,000/t DAP, with a credit period of 45 days.

A trader informed BigMint, "Despite lower prices, there is limited buying interest in India's domestic scrap market. Mills are prioritizing local scrap due to high expenses associated with imported scrap from Southeast Asia. Concerns about port congestion and rising freight costs are exacerbating the situation. Notably, Southeast Asia accounts for about 45% of India's stainless steel scrap supply."

Freight rates from the Southeast Asian region to India's West Coast currently stands at $200/t or $4,000/20-ft container.

This week, stainless steel imported scrap prices have seen a slight gain. BigMint's assessment indicated prices of 304-grade scrap increasing slightly by $20/t to $1,450/t CFR Mundra.

The 316-grade scrap stands at $2,650/t CFR Mundra, edging up by $10/t w-o-w. Meanwhile, a few suppliers were heard offering 316-grade scrap at $2,680/t levels. However, buyers' bids were heard in the range of $2,620-$2,630/t.

A supplier source based in Thailand said, " There is minimal demand for scrap from India due to rising freight rates, resulting in a noticeable gap between bid and offer prices in the market. Suppliers are pricing SS 304 scrap at $1,460-$1,480/t, while buyers are bidding lower at $1,410-$1,430/t levels, creating a disparity of $50-$60/t. "

Meanwhile, offers of SS 201 scrap stood at $780-$790/t, and SS 430, at $630-$640/t CFR Mundra.

India's stainless steel scrap imports stagnant m-o-m in May

In May 2024, India experienced a minor increase in stainless steel scrap imports, with data from BigMint showing imports of 83,200 t. This reflects a 1% incline from the previous month's 82,400 t. However, compared to the previous year, SS scrap imports saw a significant 17% decrease, down from 99,900 t.

Finished flat segment

As per BigMint's assessment, 304 HRC stood largely stable w-o-w at INR 178,000/t and prices of SS 316 HRC stood at INR 309,000/t ex-Mumbai.

A source mentioned, " Transactional activity is expected to stay subdued in the coming month, driven by sluggish market conditions attributed to subdued demand and limited transactions from the downstream sector, alongside a decline in LME nickel prices. "

Finished longs: indicative levels

In the finished longs segment, price indications for 304 black round bars were heard at INR 169,000-INR 171,000/t exw-Delhi. Additionally, price levels for SS 304 bright bars were heard at INR 190,000-INR 192,000/t ex-Delhi.

Indicative offers of SS 304 hexagon stood at INR 201,000-INR 203,000/t and SS 304 angles are at INR 197,000-INR 199,000/t, both ex-Delhi.

According to a source, the average price difference between black round bars and bright bars is approximately INR 21,000-25,000/t.

China market overview

During the week, China's domestic stainless steel prices edged down w-o-w. Prices of 304 grade CRC reached RMB 14,800/t ($2,039/t) ex-works. FOB prices of 304 grade CRC stood at $2,073/t (down $15/t).

Chinese stainless steel prices, both domestically and for exports, have dropped due to decreased summer demand and heightened production levels. Increased operational capacity at Chinese mills has resulted in surplus inventory and reduced prices, exacerbated by global market trends of low nickel prices.

Raw materials scenario

Ferro molybdenum: Indian ferro molybdenum prices fell by INR 73,000/t ($873/t) w-o-w in comparison to the previous assessment on 19 June. Prices dropped as there was some resistance to higher offers both in the domestic and international markets.

As per BigMint assessment on 26 June, Indian ferro molybdenum prices stood at INR 2,747,000/t ($32,866/t) exw-Nagpur on a 60% pro rata basis.

Ferro chrome: Indian ferro-chrome prices (HC, FeCr60%) stood at INR 112,000/t exw-Jajpur, slightly up by INR 2,700/t w-o-w.

Global update

Global markets in H1 2024

As per sources, in the first half of 2024, China's domestic stainless steel market underperformed while export opportunities flourished. European supply declined due to strikes at South Korea's POSCO Steel and production in Japan and India were affected by maintenance, bolstering demand for Chinese exports. Meanwhile, Southeast Asia's economic recovery fuelled increased stainless steel exports, with China shipping around 416,000 t to the region, up 37.9% y-o-y, notably driven by Vietnam.

Outlook

Stainless steel prices are expected to potentially decrease, driven by the downward trend in LME nickel prices. Furthermore, imports of stainless steel scrap are likely to decline next month due to continued increases in freight rates.