Indian Steel Market Highlights, Week 1

Indian steel industry has performed quite well in 2017, inline to the steel industry performance there is better demand in 2018 especially the offers of Semi finish and finished steel rose up to INR 2,000/MT in the first week of 2018.

In the current week the prices of Semi- finished, finished long & flat steel surge by INR 1,000-2,000/MT following the hike in raw material input cost and good demand in the major markets.

Iron Ore: OMC raised iron ore base prices for its upcoming e-auction by INR 200-300/MT against previous e-auction.

Major merchant miners in Odisha have further increased prices iron ore prices from on 02nd Jan'18. Lump prices have further increased by INR 500/MT and fines prices have moved up by INR 300/MT.

-- Five working iron ore mines Mesco Steel, Serajuddin & Company, government-owned IDCOL and National Enterprises in Odisha have gone out of operations as they failed to pay out the penalties, as per deadline was given by honorable Supreme Court till 31st Dec'17.

-- NMDC has also raised fines prices by INR 500/MT for January deliveries.

Pellet: Amid hike in iron ore prices, Central India and eastern India based pellet makers raised offers significantly. Amid high domestic prices, Indian pellet manufacturers may lessen interest for exports.

Imported scrap offers to India hiked by USD 10/MT on W-o-W basis in the recent trades. USA origin Shredded scrap in containers sold at USD 380/MT and now offers are around USD 380-385/MT, CFR Nhava Sheva. HMS (80:20) in containers offered around USD 350-355/MT from USA and heard at USD 330-335/MT from West Africa while P&S scrap offers were around USD 380/MT on CFR Nhava Sheva basis. Strong scrap demand over falling inventories, bullish local finish markets and hike in iron ore prices indicate market for scrap to remain strong in coming days.

Coking Coal Offers: Coking Coal prices have remained high, but have stagnated at the week-ago rates as buying activities stalled due to the New Year holidays. The importing appetite among Indian steel makers were learnt to be subdued as they have stocked sufficient inventories of the coal. Spot prices of the Premium HCC have is at around USD 262/MT FoB Australia. There is also no prospect of any downward traversal of the prices as importing affinity in China has strengthened.

Semis Finished Market Shoot Up Sharply due to rising raw material cost amid good demand, closure of some major mines in Odisha & Lower steel imports.

-- Indian Sponge iron export offers stable despite limited inquiries. SteelMint's price assessment for 80 FeM Sponge lumps in current week stood at USD 380/MT which was at USD 375-380/MT during last week, CPT Benapole port (land port of Bangladesh and India).

-- India's SAIL cancels 27,000 MT Billet export tender in the week which had floated from Haldia and Vizag port. The steel maker has canceled the tender owing to issues in material availability.

-- Vizag Steel has further increased its steel prices for Jan 2018 deliveries by INR 1,000-2,000/MT (USD 15-32). The offers increase for Rebar by INR 2,000/MT, Wire rod by INR 1,500/MT, Structure by INR 1,000/MT, Billet by INR 1,500/MT & Pig Iron by INR 700/MT.

-- Jindal Steel has offered Steel grade Pig iron at INR 28,000/MT ex-Raigarh & Granulated Pig iron (panther shots) at INR 26,500/MT ex-Angul, Odisha. The price increase by INR 500/MT (W-o-W) against last week offers.

-- Vedanta Resources, a prominent foundry grade pig iron manufacturer in India, has raised prices by INR 1,000/MT (4%) for Jan'18 deliveries.

-- Tata Metaliks also raised its foundry grade pig iron prices by INR 600/MT couple of times in a week duration. The company's offer are reported at INR 30,200/MT ex-Kharagapur plant.

-- SteelMint's export price assessment for non-alloy steel grade pig iron is assessed at USD 355-360/MT FOB, which was USD 350-355/MT FOB last week.

Long Steel Offers Improve: As per analysis, market participants have observed improved trade activities amid high volatility in prices. In the week prices have increase for rebar, Wire rod & Structures by INR 1,000-2,000/MT (USD 15-32).

Although, Industry participants believe that, market will remain supported with minor amendment as large producers raised finish long steel prices by INR 2,000/MT in the beginning of week due to low inventory and high raw material cost along with supportive global demand. South based manufacturers/exporters are dwelling for getting better price level rather to conclude in existing level due to appreciating INR against USD.

-- Central region - Raipur based Wire rod manufacturers offering trade discount by INR 800-1,000/MT.

-- The current offer prices for 12 mm rebar are assessed - at INR 36,900-37,100/MT Ex-Raipur, INR 36,100-36,300/MT Ex-Durgapur, INR 39,200-39,400/MT level Ex- Delhi, INR 39,100-39,200/MT Ex-Mumbai.

Flat Steel Further rise : Major Indian steel mills have raised flat steel prices upto INR 2000/MT in the start of CY18 owing to rapid surge in iron ore prices in domestic market along with uptrend in imported coking coal offers to India.

Thus trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed in the range of INR 42,500/MT (ex-Mumbai), INR 42,500-43,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST @ 18%.

As per SteelMint assessment current trade reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 46,000-46,500/MT (ex-Mumbai) INR 46,500-47,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST @ 18%.

However higher production cost pushes the domestic manufacturers to raise the prices of flat steel and pass on the inflated cost to end users.

Indian Raw material and Finished Steel reference Prices as on 6 Jan 2018 (Week 1)

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

Indian Export Reference Prices as on 6th Jan'18

Prices in USD/MT
Source: SteelMint Research