Indian Steel Market Weekly Snapshot

Indian steel mills reported good demand during the 2nd week of the year (4-11th Jan'20). As per mid scale mills, following rally in prices sufficient orders have received, for which dispatches are going on.

Inline with this, the primary mills raised their prices for 2nd time in Jan'20. However, the private large mills are yet to announce fresh prices which are expected to be declare in coming week with increase of INR 500-1,000/MT (USD 7-14).

As per SteelMint's assessment, this week prices of Sponge iron, Billet & Rebars have increased by INR 100-700/MT, through the mid scale mills.

Further, the domestic Flat steel prices marginally rise and are expected to be hike in coming week by INR 750-1,000/MT with the fresh price revision by large scale mills.

IRON ORE and PELLETS

Indian government has notified the amended mining law which allows the seamless transfer of regulatory approvals like forest and environmental clearances to new owners of operational iron ore mines. This ordinance have come into effect from 10th Jan 2020.Successful bidder of the expiring mining leases through auction are deemed to have acquired all rights, clearances, approvals vested with previous bidder for a period of 2 years.

-- PELLEX stable at INR 7,550/wmt (DAP Raipur). Pellet deals for around 12,000 MT reported to Raipur sponge makers at INR 7,400/MT(Ex plant); normalizing for freight to Raipur at INR 7,550/MT (DAP, Raipur) during the 2nd half of the week.

-- KIOCL has concluded two pellet export deals in this publishing window for Fe 64% and 2% Al at USD 111.46/MT, FoB and another deal for Fe 65% with less than 1% Al at around USD 113-114/MT, FoB India. However, SteelMint Pellet export assessment for the regular grade (Fe 64% and 3% Al) stands at USD 104-105/MT, FoB India.

COAL

Australian premium low-volatile hard coking coal prices have continued to surge this week, driven by the strong buying interest in China. Market expectations on spot prices remain firm, with each trade done higher than previous conclusions on the back of firm demand amid tightness in prompt supply.

Buyer sources estimate that there are not many cargoes left in the hands of the Chinese traders with February laycan. There are common expectations that spot prices will rise post Chinese New Year, while disequilibrium between demand and supply will continue to support spot prices.

-- Latest offers for the Premium HCC grade are assessed at around USD 148.00/MT FOB Australia, USD 159.50/MT CNF China and USD 161.15/MT CNF India.

FERROUS SCRAP

Imported scrap market to India witnessed further improvement in buying activities. Trades of HMS from the Middle East and African origins got concluded at further increased prices, while renewed demand of scrap by mills and improved domestic steel fundamentals have given confidence to the market for rise in buying activities.

-- UAE origin HMS 1 Super (no ci gi) was sold in decent quantities at USD 310-312/MT CFR Nhava Sheva, rising by USD 5/MT on a weekly basis. HMS 1&2 (80:20) from Europe was sold at USD 295/MT CFR Nhava Sheva, while few sellers in UK offered with premium at around USD 300-301/MT CFR. West African HMS was sold at USD 302-303 at the closing of the week. Some offers for Turning were reported at around USD 285/MT CFR.

-- SteelMint assessment for containerized Shredded from the USA and UK to India stands at USD 320-325/MT, CFR Nhava Sheva, up by USD 5/MT against last week. Some of the suppliers in the UK are offering Shredded scrap at USD 325/MT CFR Nhava Sheva with some sales being reported, while few USA origin offers stood lower at USD 320-322/MT CFR with some improvement in buying observed.

SEMI FINISHED

Initial days of the week, the semi finished market trend remained upside as there was good demand in steel products. However, spot steel trade activities got slow down by the end of the week.

With the constant rise, the billet prices moved up by INR 100-700/MT following better demand in finished products with surge in price range. Also, Sponge iron prices increased by INR 200-400/MT, W-o-W.

-- Indian Sponge iron export offers further up following surge in domestic prices & falling rupee against the US dollar. The price assessment stands at around USD 310/MT CPT Benapole (dry port of India & Bangladesh), equivalent to USD 325/MT CFR Chittagong, Bangladesh.

-- Indian mid scale mills export offers to Nepal reported at USD 425-427/MT for Billet & USD 490/MT for Wire rod, ex-mill at Durgapur. However, no fresh deals as buyers opt wait & watch trend.

-- Jindal Steel has reduced steel grade pig iron prices by INR 600/MT to INR 30,200/MT ex-Raigarh, Central India.

-- Nepal's semi finished steel imports stood 120,487 MT, observed a rise of 66.8% M-o-M in Dec '19. Billet import volumes have hit 5-month high as these levels were last seen in Jul '19.

-- TATA Metaliks has raised basic (steel) grade pig iron prices by INR 1,700/MT (USD 24) & Foundry grade by INR 1,800/MT (USD 25) for Jan'20 deliveries. The current offers for Low Silicon (1-1.5%) pig iron stands at INR 29,500/MT (USD 413 & Foundry grade at INR 32,000/MT (448); ex-plant, Kharagpur, eastern India.

-- On 4th Jan 2020, SAIL (Rourkela Steel Plant) had offered 3,900 MT steel grade pig iron at a base price of INR 26,450/MT & managed to sell entire quantity at a weighted average price of INR 30,300/MT Ex-Rourkela.

FINISH LONG

On weekly basis, Indian Finish long steel market of mid- sized mills consistently maintain the upward trend over increased raw material prices and the manufacturers have raised their offers by INR 300-800/MT in most of the regions.

Market participants shared that high rebar prices absorb low buying inquiries from certain specified regions but overall trade volume exist in an average range particularly from the western region and further anticipating that the momentum of demand and trade activity may get minor disturbance in few regions due to upcoming festival in next week.

-- Current trade reference rebar prices (12-25 mm) through mid sized mills assessed at INR 34,100-34,300/MT ex-Raipur & INR 36,500-36,900/MT ex-Jalna & INR 36,100-36,400/MT ex-Chennai.

-- Large scale mills i.e. SAIL & JSW Steel have raised their rebar offers by INR 500-1,000/MT amid strengthening medium/small scale mills price range along with better demand and lessened stock. The large-scale mills rebar offers are assessed at INR 38,000-38,500/MT ex-Mumbai (Size 12 mm), Grade ISI 500 D, excluding GST 18%.

-- Central region, Raipur based heavy structure manufacturers have maintained trade discount by INR 1,000-1,500/MT and Current trade reference price stands at INR 37,700-38,100/MT (200 Angle) ex-work.

-- Trade discounts in Raipur wire rod is currently at INR 1,500-1,700/MT through traders and trade reference prices stood at INR 34,000-34,500/MT ex-Raipur and INR 34,800-35,000/MT ex-Durgapur, size 5.5 mm.

FINISH FLAT

Major Indian steel manufacturers are planning to further raise HRC and CRC prices in domestic market by INR 750-1,000/MT owing to lesser availability of material in the domestic market. Along with this restocking demand among traders and absence of imports are other factors that boosted domestic price hike.

After hike company's indicative prices of HRC (IS2062 2.5 - 8 mm) will be INR 38,000- 38,500/MT and for CRC (0.9 mm Gr O) INR 43,000-43,500/MT ex-Mumbai. The revised offers are expected to come into effect from early next week.

Prior to this, in the beginning of this month major Indian steel mills raised HRC & CRC prices by INR 1,500-2,000/MT in the domestic market.

However traders and stockists have already raised prices in domestic market over improved buying. Current trade reference prices for HRC stands at INR 37,250-37,500/MT ex-Mumbai, INR 38,000-38,250/MT ex-Delhi. And the trade reference CRC (0.9 mm, IS 513) prices on a weekly premise assessed at INR 43,500-44,000/MT ex-Mumbai, INR 42,000-43,500/MT ex-Delhi. Prices mentioned above are basic, and extra GST@ 18% will be applicable

Reference Prices as on 11th January 2020 (Week 2)

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

Indian Export Reference Prices as on 11th Jan'20

Prices in USD/MT
Source: SteelMint Research