Indian Steel Market Weekly Snapshot

In the 1st week of 2020, Indian primary mills announced hike in domestic finished steel prices due to rise in raw material prices along with improved demand globally. Also, the mid scale mills reported strong demand from the domestic buyers, resulting in fall in inventories among large as well mid sized mills.

As per SteelMint's assessment, in these days the prices of Semis products (Billet & Sponge iron) inclined by INR 400-1,800/MT & Rebar upto INR 2,000/MT (USD 28) through the medium scale mills. Furthermore HRC/CRC registered price hike of around INR 2,000/MT by major mills.

IRON ORE and PELLETS

Odisha's Rungta, Serajuddin Mines, hike Iron ore lump offers by INR 500-600/MT and fines by INR 300/MT yesterday. Other miners like KJS and Kaypee also offering at a similar level. At the beginning of this week Essel Mining had also increased its offers for iron ore further in lumps by INR 400-450/MTand fines price by INR 150/MT (Ex-mines).

-- NMDC increases Iron ore fines and lumps prices by INR 200/MT, DR-CLO by INR 230/MT & ROM by INR 190/MT for Jan'20.

-- Odisha government will issue Notice Inviting Tenders (NITs) in respect of nine virgin or freehold mineral blocks tentatively towards the second week of February 2020.

-- PELLEX up by INR 450/MT to INR 7,100/wmt (DAP Raipur) on active trades this week. Deals of around 70,000 MT reported at 7,000/MT (Ex-plant). Bellary based pellet makers sold around 35,000 MT pellet for Fe 63% grade at the range INR 7,200-7,500/MT & 5,000 MT high-grade pellets (Fe 65%) at INR 8,000/MT (EXW). Raigarh based pellet makers had sold around 25,000 MT pellets in the last one week at INR 6,500-6,900/MT (EXW), now offer at INR 7,200/MT (EXW).

-- Odisha based pellet maker this week concluded a pellet export deal to China consisting of Fe 64% with 3% alumina at around USD 114/MT, CFR China. However, SteelMint Pellet export assessment for the regular grade (Fe 64% and 3% Al) stands at USD 102/MT, FoB India.

COAL

Australian premium low-volatile hard coking coal prices have moved higher this week, as several new bookings were done through sell tenders of various coal grades, alongside higher indicative bids from the spot market. Bullish sentiments persisted in the Chinese market in anticipation of port restrictions to ease out gradually, according to market sources.

Further, there were common expectations of a steady Chinese domestic metallurgical coke market until the Lunar New Year celebrations. Meanwhile, the impending phase-one trade deal between the US and China may bode well for the American coal sellers.

-- Latest offers for the Premium HCC grade are assessed at around USD 141.00/MT FOB Australia, USD 153.00/MT CNF China and USD 154.40/MT CNF India.

FERROUS SCRAP

Imported scrap market in India is expected to pick up from next week, with renewed demand for scrap by mills and improved domestic steel fundamentals giving confidence to the market for a rise in buying activities. Some tentative offers for next week indicate a price rise once the markets resume again from Monday.

-- SteelMint assessment for containerized Shredded from the USA and UK to India range-bound at USD 315-320/MT, CFR Nhava Sheva, up by around USD 5/MT against last week, with most industry participants expecting fresh offers not less than USD 319-320/MT CFR from next week onwards.

-- UAE origin HMS 1 Super (no ci gi) got concluded at USD 305-310/MT CFR. HMS 1 from South Africa was sold at USD 305-306/MT CFR at the early in the week, with new offers expected at around USD 315/MT CFR. Offers for UK origin HMS 1&2 (80:20) assessed at around USD 292-293/MT CFR, while West African HMS was concluded at USD 300/MT CFR Goa yesterday.

SEMI FINISHED

On a weekly basis, Indian Semis market showed improvement, in which domestic Sponge iron offers surge by INR 400-1,000/MT & Billet by INR 600-1,800/MT (USD 8-25).

In these period major rise of INR 1,800/MT in billet seen in southern India on account of improved demand & rising steel prices globally.

Inline, pig iron prices remained strong. In Central India prices increased by INR 2,500-3,000/MT, while in Eastern India the private pig iron producers have raised prices by around INR 1,000/MT, W-o-W.

-- Latest offers for steel grade pig iron is hovering at INR 28,500-29,000/MT FoR Raipur & INR 27,100-27,500/MT ex-Durgapur.

-- Indian large mills hold export offers to Nepal, however deals through the mid scale mills for billet (induction grade, 100*100 mm) reported at around USD 415-420/MT ex-mill at Durgapur, this is equivalent to USD 435-440/MT CPT Nepal.

-- Kolkata, eastern India based participants reported export deals of sponge iron (80 FeM, 100% lumps) about 8,000-10,000 MT at USD 300-308/MT CPT Benapole, equivalent to USD 318-320/MT CFR Chittagong, Bangladesh.

-- TATA Metaliks has raised basic (steel) grade pig iron prices by INR 1,300/MT (USD 19) & Foundry grade by INR 1,200/MT (USD 17) for Jan'20 deliveries. The current offers by TATA Metaliks for Low Silicon (1-1.5%) pig iron reported at around INR 27,800/MT (USD 390); ex-plant & the Foundry grade pig iron at INR 30,200/MT (423) ex-plant, Kharagpur, eastern India.

-- SAIL's Rourkela Steel Plant auction held today (4th Jan'20) to sell about 3,900 MT steel grade pig iron; had received improved response. The base price for the tender was quoted by RSP at INR 26,450/MT and 100% material sold out at in the range of INR 29,700-30,600/MT ex-plant, Rourkela.

-- RINL has inviting e-tender notice for export of 30,000 MT blooms. The destination for the sales notice floated in any country other than Nepal and banned countries.The last date for submission bids is by 14:00 Hrs on 10-01-2020.

FINISH LONG

Indian Finish long steel market through secondary mills continuously follow the upward trend and show better response in this week as the demand slightly improved in terms of booking volume but lifting yet to improve in specific regions.

Market participants have shared there is shortage of logistic vehicles, hence freight charges have been increased up to certain level and previous orders yet to dispatch which is developing minor pressure for near term which would ultimately sustain the price range for near term and weekly rebar prices hike by INR 1,200-2,000/MT.

-- Current trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 34,100-34,400/MT ex Raipur & INR 36,100-36,500/MT ex-Jalna, INR 36,300-36,700/MT Ex Chennai.

-- Central region, Raipur based structure manufacturers have change the gauge parity in light sizes and raise by INR 500-800/MT from 25 angle to 75 angle along with 75/40 and 100/50 channel and heavy structure remain unchanged. And the trade discount maintained on heavy structure which is existing on the same range by INR 1,000-1,400/MT and trade reference prices registered at INR 37,900-38,200/MT (200 Angle) ex-work.

-- Trade discounts in Raipur wire rod is currently at INR 1,000-1,500/MT and trade reference prices stood at INR 34,200-34,700/MT ex-Raipur and INR 34,500-34,700/MT ex-Durgapur, size 5.5 mm.

-- Large scale mills have increased their price by INR 1,000-2,000/MT across region amid low inventory levels and positive sentiments with healthy project supply to construction material for housing, metro and railway supply.

-- Current rebar offer range reported through trade associates is INR 37,000-37,500/MT ex-Hyderabad, INR 36,500-37,000/MT ex-Chennai & INR 37,000-38,000/MT ex-Mumbai, size 12mm and excluding GST.

-- Current Structure offers assessment registered - Angle 50/6 at INR 40,500/MT and 65 Angle at INR 39,500/MT and Wire Rod 5.5 mm at INR 37,200/MT ex-kalamboli (Mumbai)

-- APL Apollo Tubes Ltd, has increased ERW Pipe price by INR 1,000/MT to INR 40,500/MT (USD 568); ex-plant in central India, Chhattisgarh for January 2020.

-- Vizag Steel concludes Wire rod export tender (5.5mm, qty 5,000 MT) at around USD 450-455/MT FoB India. The tender bid due date was 26th Dec'19.

FINISH FLAT

Major Indian steel manufacturers have raised HRC & CRC prices by around INR 1,750-2,000/MT owing to hike in raw material prices, improved demand in trade segment and decent export bookings in the past few months. Also absence of imports to India from FTA nations motivated Indian steel mills to raise steel prices.

After Hike Company's effective prices for HRC (2.5-8 mm, IS2062) is hovering around INR 37,200-37,500/MT ex-Mumbai and CRC prices (0.9 mm IS 513 GR) stands at around INR 42,200-42,300/MT ex-Mumbai. Prices mentioned above are basic and extra GST @18% is applicable.

Meanwhile traders have already raised HRC prices in retail market.Current trade reference prices for HRC stands at INR 37,000-37,500/MT ex-Mumbai, INR 37,500-38,000/MT ex-Delhi, and INR 37,000-38,000/MT ex-Chennai. And the trade reference CRC (0.9 mm, IS 513) prices on a weekly premise assessed at INR 43,000-43,500/MT ex-Mumbai, INR 41,700-43,000/MT ex-Delhi and INR 43,000-43,500/MT ex-Chennai. Prices mentioned above are basic, and extra GST@ 18% will be applicable

Reference Prices as on 4th January 2020 (Week 1)

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

Indian Export Reference Prices as on 4th Jan'20

Prices in USD/MT
Source: SteelMint Research