Indian Steel Market Highlight, Week 22
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Week 22 was promising week for the Indian steel makers as the prices went high in line with improved demand for semis and long steel. Stagnant sentiments continued in the flat market as the demand remained anemic.
Raw material Offers Reel under Pressure: In the week, domestic iron prices were unaltered, while pellet offers further plunge by INR 100-500/MT.
- India's iron ore output observed radical increase last fiscal and grew from 155.9 MnT in FY16 to 190 MnT in FY17.
- Indian pellet exports resume on increased spot pellet premium, restricted pellet supply from Brazil and increased demand in China. According to market sources report to SteelMint, an east India based pellet maker has recently concluded an export deal for Fe 64% grade pellets at around USD 87/MT, CFR China. Another export deal to China is also under negotiations and is also expected to close around USD 87/MT, CFR China.
- NMDC is India's single largest iron ore producer, clocked output of 22 MnT from its Chhattisgarh; Central India based mines in FY17.
Coking Coal offers Further Slip: Coking Coal imports have decline further following uninterrupted supply from Australia. The fresh offers are evaluated at USD 166/MT CFR India against USD 182/MT a week ago.
Semis Market highlights: Indian semis (Sponge & Billet) prices increased in the past week up to INR 1,000/MT (USD 15) amid improved demand.
Although, for outlook purpose there are anticipation that, semis offers to soon may come into pressure because of the bulk scarp vessel coming to India which will adversely affect the prices.
Improved sentiments for Finished Steel: Indian Finish long (rebar & structure) prices increased over good demand supported by increase in billet offers.
The long steel offers rise up to INR 1,300/MT (USD 20) as compared to trade week 21. It is expected that the prices to remain positive for the week as the demand is gradually improving.
In contrast to flat steel; HRC prices reduced by INR 500/MT due to the flat demand but CRC and the HR plate's offers remained stable in the major regions of the country.
Export Analysis for Week 22
The past week was quite good for the export offers as few of the companies resumed the export offers and few export deals were closed successfully.
- JSW surprised the flat steel market as they have increased the export offers as there was improved demand from South East Asian Countries. Fresh offers for base grade HRC by the company are FoB at USD 470/MT. This hike was in line with the hike in the Chinese export offers.
- Mill scale export offers remained firm for the week. Further, India has concluded export of 40,000 MT mill scale from East cost of India which is expected to go to China which is the largest consumer of Indian Mill Scale.
- Also in Last week KIOCL's produced pellet are exported to South Korea with at 51,203 MT from New Mangalore port. This is the 2nd iron pellet vessel to the country.
Raw material and Finish Steel Prices as on 27 May'17 (Week 22)
| Products | Markets | Taxes | Prices in INR/MT | W-o-W |
| Pellet Fe 63%, 6-20 mm | Ex-Barbil | ED 12.5%, VAT/CST Extra | 3,550 | -450 |
| Iron ore Fe 62%, 5-18 mm | Joda loaded to wagon | Incld Royalty, DMF & NMET | 3,650 | 0 |
| Coaking Coal, Premium HCC | CNF India | Prices in USD | 166 | -16 |
| Scrap HMS (80:20) | Ex-Mumbai | ED 12.5%, VAT/CST Extra | 21,000 | +300 |
| C-DRI 80 FeM | Ex-Raipur | ED 12.5%, VAT/CST Extra | 16,100 | +500 |
| P-DRI 80 FeM | Ex-Raipur | ED 12.5%, VAT/CST Extra | 14,500 | +500 |
| Pig iron Steel grade | Ex-Raipur | ED 12.5%, VAT/CST Extra | 22,700 | -1,400 |
| Billet 125*125 MM | Ex-Mumbai | ED 12.5%, VAT/CST Extra | 26,800 | +700 |
| Rebar (12mm) | Ex-Mumbai( Medium Scale) | ED 12.5%, VAT/CST Extra | 30,800 | +600 |
| Ex-Mumbai( Large Scale) | ED 12.5%, VAT/CST Extra | 35,600 | 0 | |
| HRC (2.5-8 mm) | Ex-Mumbai | Incld ED 12.5%, VAT/CST Extra | 39,000 | -500 |
| CRC(0.90mm) | Ex-Mumbai | Incld ED 12.5%, VAT/CST Extra | 46,000 | 0 |
| HR Plate(5-10mm) | Ex-Mumbai | Incld ED 12.5%, VAT/CST Extra | 39,000 | 0 |
| Wire Rod (5.5 mm) | Ex-Raipur | ED 12.5%, VAT/CST Extra | 29,400 | +500 |
| Structure ( 40 Angle) | Ex-Mumbai | ED 12.5%, VAT/CST Extra | 30,800 | +100 |
Sources SteelMint Research
