Indian Steel Market Weekly Snapshot

Indian steel prices increased sharply during the Week 34 (20-25 Aug) on improved domestic demand and supply concern of raw materials.

As per industry players, with significant surge in prices, demand has gained momentum and producers have sufficient bookings in hand for which dispatches are in pipe line.

As per SteelMint assessment, the prices of Semi Finished products have inclined by INR 200-1,600/MT (USD 3-23) & Finished steel upto INR 2,000/MT (USD 29 ). However, the Flat steel prices were unaltered in the traders market.

Market participants believe that, the large steel mills are likely to raise long steel prices for Sep'18 deliveries on account of healthy bookings for domestic & exports amid limited stock with them.

Iron Ore : Odisha based merchant miners- RP Sao, KJS Ahluwalia, Rungta mines & Kaypee Enterprises have increased iron ore prices by INR 300/MT in both lumps and fines. Hike in pellet prices along with the surge in sponge prices have resulted in the hike in offers by Odisha based major miners.

On 22nd Aug'18, NMDC (C.G.) has increased iron ore prices by INR 140-170/MT. Baila lump(Fe 65%)- INR 3,350/MT; Baila fines(Fe 64%)- INR 2960/MT; DR CLO(Fe 67%)- INR 3,890/MT & ROM(Fe 65%)- INR 3,090/MT (Royalty, DMF & other taxes extra).

Indian pellet offers in the domestic market have increased again sharply this week. Most of the pellet makers in eastern India are actively looking for exports amid high realization in the global market resulting in limited offers in the domestic market. Central India (ex- Raipur) pellet offers have further increased 3.5 years high. Assessment for this week is at INR 8,500/MT against last week's assessment of INR 7,300/MT (basic).

As per the sources, India Pellet export prices for China raised to around USD 148-150/MT, CFR China. Last deals from Indian pellet makers have concluded at USD 145-146/MT, CFR China for regular grade. South Korean steel mills have also book Indian pellet cargoes at around USD 145-146/MT, CFR South Korea.

Indian ferrous scrap importers have observed decent bookings in containers in last two weeks at almost stable prices. Amid a slowdown in purchases on account of EID holidays in Pakistan and Bangladesh, Indian importers witnessed improving sentiments this week. While, Domestic scrap prices moved up in all major regions, narrowing a price gap between imported and domestic scrap further.

Price assessment of UK/Europe origin containerized Shredded scrap stands at USD 340-345/MT, CFR Nhava Sheva. HMS 1&2 (80:20) heard to have booked at almost stable price of USD 335-340/MT from UAE and at around USD 325/MT from UK/Europe.

Coking coal: Seaborne premium hard coking coal prices have remained unchanged since the last two weeks, as buying interest from Chinese end-users remained steady. However, strict port restrictions have dampened demand for physical cargoes of seaborne coals in China. Furthermore, Chinese coal demand has been largely affected by other headwinds, like Yuan currency weakness, as well as winter production cuts. Meanwhile, Indian buying activity has considerably subdued due to the onset of monsoon. Latest prices for the Premium HCC grade are assessed at around USD 184.50/MT FOB Australia and USD 200/MT CNF India.

Indian Semi finished prices increased further over improved demand and supply concern of raw material prices. As per SteelMint assessment, the domestic Billet & Sponge prices have increased by INR 300-1,600/MT (USD 4-23), W-o-W.

Indian Induction grade Billet export offers to Nepal by Durgapur based mills have increased with surge in domestic prices. The latest export offers of Billet produced through EA or induction furnaces are evaluated at USD 510-515/MT ex-Durgapur, East India, equivalent to USD 535-540/MT CFR Raxaul border, Nepal.

-- Indian sponge iron export offers to Bangladesh for lumps of grade FeM 78-80, recorded at USD 355-360/MT CPT Benapole (dry land port of Bangladesh & India) and USD 37/MT CFR Chittagong, Bangladesh.

-- Market participants believe that, NINL likely to raise pig iron prices or keep it firm looking at healthy bookings in recent price circular and also due to rising prices of substitute products.

-- Jindal Steel has rallied its offer by INR 500/MT to INR 30,000/MT Ex-plant, Raigarh for Steel grade pig iron. Prices for panther shots (granulated pig iron) being raised to INR 28,5000/MT from earlier about INR 28,000/MT Ex-plant, Angul Odisha.

-- SteelMint's Pig iron export price assessment stood at USD 375-380/MT FOB Brazil, USD 375-380/MT FOB Black Sea & USD 365-370/MT FOB India.

Indian Finish Long Steel escalated over improved demand on prevailing positive trends and the price range moved up to INR 2,000/MT commodity wise in specified regions. Mounting prices have being followed by raw material supply concern, healthy export by large and medium scale producers along with rapid construction activities on upcoming elections.

Further, central India based structure manufactures have increased discount range to INR 800-1,000/MT, as per the booking quantity.

-- Wire Rod trade discount offered by suppliers in Raipur have continue to lower and hovers at INR 400-500/MT in the current week. Discount more or less same in last week too.

-- Currently medium mills rebar (12-25 mm) price assessed at INR 39,000-39,400/MT Ex- Jalna, INR 39,000-39,400/MT Ex- Raipur & INR 40,000-40,400/MT Ex-Chennai. All prices are basic & excluding GST.

As per market participants report, Indian large steel mills are planning to raise long product prices by INR 500-1,000/MT in early Sep'18. Major reasons behind the price rise sited - revival in domestic and export demand & sharp surge in rebar and wire rod prices by medium mills. Industry leaders believe, there is widening gap between demand and supply in the domestic market.

-- Presently, large steel producers are offering 12mm rebar in the range of INR 40,500-41,000/MT (ex-Mumbai & excluding 18% GST).

-- A large mill based in South & West India had exported bulk quantity of rebars about 40,000 MT in August.

Finish Flat Steel: This week market sources shared that major Indian steel mills may increase domestic HRC & CRC prices for September deliveries.However the quantum has not been finalized yet. Domestic iron ore prices moved up this week. Meanwhile improved bookings in domestic market may collectively raise HRC & CRC prices in domestic market.

Traders and manufacturers reported positive sentiments and increase in buying activity among end users in domestic market. Also anticipation of better demand in the next month as the monsoons subsides may push prices in upward direction. However this week prices remain firm in traders market.

Current trade reference prices for HRC (IS2062) 2.5 mm-8 mm is around INR 45,500/MT (ex-Mumbai) & INR 45,200/MT(ex-Delhi).The prices for CRC (IS513) 0.9mm is hovering in the range of INR 50,000/MT (ex-Mumbai) & INR 50,000-51,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST@18% on cash payment basis.

Previously, in the beginning of the August,few Indian mills cut HRC CRC prices by INR 500-750/MT and Indian govt owned SAIL had roll over flat steel prices for the month of August amid slow demand and prevailing monsoons

Indian Raw material and Finished Steel reference Prices as on 25 August 2018 (Week 34)

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

Indian Export Reference Prices as on 25th August'18

Prices in USD/MT
Source: SteelMint Research