Indian Steel Market Weekly Snapshot

Indian Iron & Steel market remained downtrend during the Week-5 (29 Jan - 4 Feb) of 2018, as the prices fall owing to lack of domestic demand.

During the week, prices of Semis & Finished steel products fall by INR 200-500/MT (USD 3-8) in across major Indian markets. However, there was stability in flat steel offers amid moderate demand in domestic market.

Raw Material: Major merchant miners in Odisha have kept iron ore prices unchanged as of now. Earlier, this week the Supreme Court conducted hearing on Odisha illegal iron ore mining on 30 Jan'18. Out of five iron ore working mines that were asked to shut down operations, two among them have made the payment. The Apex court condoned the delay and granted IDCOL permission to operate the mines subject to payment of 12% interest for 11 days.

Domestic pellet offers in India have moved down up to INR 500/MT W-o-W amid falling buying interest from sponge manufacturers. Durgapur pellet offer declined sharply this week by around INR 500/MT. Central India pellet offers remained unaltered.

Falling global scrap prices and increase in domestic scrap prices have attracted Indian mills towards booking imported scrap this week. Indian scrap importers remained active amid strong scrap demand. A steel mill booked USA origin Shredded 30,000 MT bulk cargo at a USD 370/MT, CFR Nhava Sheva. Shredded scrap prices in containers assessed at USD 360-365/MT, CFR. Offers for HMS 1$2 (80:20) assessed in the range of USD 340-350/MT, CFR from USA, Europe, and West Africa origins while post VAT imposition, Dubai HMS 1 scrap offers have increased to USD 355-360/MT, CFR.

Coking Coal prices have reversed the falling trend as the buying appetite among the Chinese steel makers resumed. Steel makers there have started stocking their coal inventories ahead of the Lunar Year holidays, prompting the Australian Coking Coal sellers to raise their spot offers. Spot prices of the Premium HCC have moved up to around USD 217.5/MT FoB Australia.

Semi Finished Market: On weekly basis, domestic sponge & billet prices decline in the range of INR 200-500/MT due to low buying interest by domestic long steel producers.

-- Indian sponge iron export offers to Bangladesh rise by USD 5/MT (W-o-W) with limited trade activities. The latest offers are assessed at USD 390-395/MT CPT Benapole & USD 415-420/MT CFR Chhittagong, Bangladesh.

-- In the initial days of week, SAIL (Steel Authority of India Ltd) has concluded 125*125 mm billet export tender at around USD 520/MT, FoB India and the cargo is likely to be shipped to Sri Lanka.

-- Vizag Steel has invited a tender for export of 11,008 MT bloom followed by 5,504 MT billet to Nepal & the due date for submitting the offer is 13 Feb'18

-- Indian pig iron prices in the major producing markets were more or less firm with poor trade activities. The private pig iron producers indicates that prices to soon come down as they are continue to remain under selling pressure. The offers for steel grade are evaluted at INR 28,300-28,500/MT ex-Raipur, INR 26,200-26,400/MT ex-Durgapur & at around INR 27,000/MT ex-plant, Odisha.

-- Tata Metaliks, one of the largest foundry grade pig iron manufacturer has raised its prices by INR 300/MT (USD 13) to INR 30,800/MT ex-plant, Kharagpur, East India, w.e.f Feb 2, 2018. The company released its quarterly results in which net profit rose more than 2 times to INR 40.35 crores in Q3 FY18 against Q2 FY18 at INR 19.52 crores.

-- Vedanta Resources reports 20% rise in Pig Iron Production, Q-o-Q. The pig iron production reported during Q3 FY18 at 165,000 MT as compared with Q2 FY18 at 137,000 MT.

-- SteelMint's pig iron export price assessment stood at USD 365-375/MT FoB India, USD 370-375/MT FoB Brazil and USD 360-370/MT FoB Black sea.

Finished Long Steel: As per week assessment, Finish Long steel market have not described enhanced demand from the existing price range as the prices have been slightly fluctuated by INR 200-500/MT in specified locations. The current offer prices for 12 mm rebar are assessed - at INR 35,900-36,100/MT Ex-Raipur, INR 36,300-36,500/MT Ex-Durgapur & INR 38,900-39,000/MT Ex-Mumbai.

-- In the week, according to sources, the large producers raised long steel prices by INR 1,000-2,000/MT (USD 15-30) and the offers are heard around at INR 43,500-44,000/MT for 12mm rebars ex-Mumbai & excluding GST.

-- The medium/small rolling mills in Delhi have increased rebar gauge parity by INR 200/MT for 8 & 10 mm and Raipur based light structure manufactures increased gauge parity by INR 300/MT in all angles w.e.f. 03rd Feb'18.

-- In the week, light Structure & Wire rod prices in Raipur, Durgapur & Mumbai slightly fall by INR 200-400/MT on decline in billet prices and low demand. The Manufacturers offers for 5.5 mm Wire Rod reported at around INR 36,800-37,000/MT Ex-Durgapur & INR 37,700-37,900/MT Ex-Raipur (excluding trade discount of INR 1,200-1,500/MT).

-- Wire rod export deals being concluded to Nepal by Durgapur based big manufacturers at around USD 578-580/MT ex-mill.

Finished Flat Steel: In line with SteelMint's forecast that Indian steel mills are likely to hike prices in February, few major Indian steel manufacturers including JSW Steel have announced price hike of INR 1500/MT in flat steel prices.

However government owned steel company - Steel Authority of India Limited (SAIL) is also planning for a price hike, however the increment could not be confirmed till date.

After increase, price of HRC (IS2062) 2.5 mm-8 mm offered by JSW Steel is assessed in the range of INR 43,500-44,000/MT (ex-Mumbai) and for CRC (IS513) 0.9mm assessed at INR 48,500-49,000/MT (ex-Mumbai).The prices mentioned above are basic prices excluding GST @ 18%.

Market participants mentioned that flat steel prices have shown uptrend owing to growth in demand from automobile sector apart from gap between domestic and imported HRC from China.However HRC imports from Japan and South Korea have remained on the lower side as these countries have limited export allocations amid strong domestic demand.

Indian Steel Mills Resumed HRC Export Offers to Vietnam

Indian mills have resumed HRC offers to Vietnam for March deliveries.Major mills in India have raised HRC export offers for Vietnam by about USD 20/MT.

Market participants reported that few major mills are quoting HRC export offers around USD 615-630/MT CFR Vietnam.This will be equivalent to USD 600-615/MT on FoB basis.

Indian Raw material and Finished Steel reference Prices as on 3 Feb 2018 (Week 05)

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

Indian Export Reference Prices as on 3rd Feb'18

Prices in USD/MT
Source: SteelMint Research