Indian Steel Market Weekly Snapshot

Indian steel prices moved down-trend during the Week-24 (8-15th Jun'19) on demand concern amid healthier supply. The producers seems received limited response as offers continued on negative direction.

As per assessment during the Week, prices of Semis & Finished long steel products fell by INR 300-1,000/MT (USD 4-14). However Finished Flat steel prices were more or less firm over slow down trade activities, as reported by participants.

IRON ORE & PELLETS

After facing suspension at its Bacheli and Kirandul mines in Chhattisgarh amid agitation from locals since 7th June'19, NMDC resumed operations on 13th June. Indian domestic pellet prices in eastern India fell sharply amid low demand, limited trades and falling Sponge prices.

-- An Odisha based pellet maker concluded 50,000 MT export deal to China earlier this week. The pellet deal concluded is for Fe 64%, 3% Al grade and the deal has been concluded at USD 125-126/MT, CFR China. However later towards end of week, expectations for Indian pellet export offers moved up amid hike in global iron ore prices.

-- SteelMint's assessment for Indian pellet (Fe 64%, 3% Al) export stands at USD 126-128/MT, CFR China this week, against last week's assessment of USD 123-124/MT, CFR China.

-- Steel industry veteran Mr VR Sharma, who was serving as Group CEO of Bangladesh based major group - Abul Khair to re-join India's Jindal Steel & Power (JSPL) as Managing Director of Steel division, SteelMint learned from its sources.

COAL

Seaborne metallurgical coal prices diverged in different directions this week, as premium low-volatile hard coking coal FoB Australia prices continued to soften on weakening global demand, but China-delivered prices edged up on the back of fresh trades concluded. Prices in the second-tier mid-volatile hard coking coal segment also rose slightly.

In China, sellers expect trading activities to remain thin in the near term on sufficient supply of coking coal in the market, coupled with low restocking needs among end-users. Chinese interest in Australian coal imports has been indefatigably dampened by a prolonged persistence of uncertainties around restrictions imposed on seaborne cargoes arriving from Australia, in addition to an unofficial ban on Australian coal vessels berthing at different Chinese ports.

Elsewhere in the Indian market, spot demand for July-August-loading cargoes of imported coking coal has moderated, due to the approaching monsoon season.

-- Latest offers for the Premium HCC grade are assessed at around USD 208.25/MT & for the 64 Mid Vol HCC grade at around USD 193.25/MT, CNF India.

SCRAP

Indian imported scrap prices continued softening in recent deals concluded on still poor demand. Lowering billet and sponge iron prices put domestic scrap prices under pressure while weakening global ferrous scrap prices kept sentiments weak for imported scrap.

-- SteelMint's assessment for containerized Shredded from Europe, UK and US stand in the range USD 318-325/MT, CFR Nhava Sheva with limited trades being reported in this range. Few offers of Shredded scrap from leading suppliers - UK assessed in the range of USD 323-327/MT, CFR.

-- Dubai origin HMS 1&2 scrap traded in very limited volume in the range of USD 317-323/MT, CFR Nhava Sheva. UK and Europe origin HMS scrap in containers remain at around USD 300-305/MT, CFR. West African containerized HMS stood in the range of USD 305-310/MT CFR.

-- Alang - one of the largest ships breaking yard in the world has been ordered to halt activities as per the order by Govt. of Gujarat (Gujarat Maritime Board) amid cyclonic storm 'Vayu' since 11th June.

-- The total volume of ship demolished in the India's Alang port was marked at 147,118 LDT (16 ships) in May'19, surged by 18.1% as against 124,614 LDT with 17 number ships in Apr'19.

SEMI FINISHED

Indian Billet offers slashed by around INR 300-1,000/MT (USD 4-14) across the country on account of mis-match trade cycle, where supply healthier although demand is slow in domestic & exports as well.

Inline, Sponge iron prices declined by INR 400-700/MT across regions following drop in Billet prices and selling pressure among producers.

-- Indian induction grade Billet (100*100 mm size) export offers to Nepal are reported at USD 425/MT (ex-mill at Durgapur), equivalent to USD 455/MT CFR Nepal (Raxaul border). Offer drop by USD 10-15/MT, W-o-W.

-- Indian state owned steel mill export tender to Nepal received highest bid at around USD 430/MT for billet (90mm) & USD 510-515/MT for Wire rod (ex-mill) - Sources

-- Indian sponge iron export offers have come down by USD 10-15/MT to USD 295/MT CPT Benapole (dry port of India & Bangladesh), equivalent to USD 310-315/MT CNF Chittagong, Bangladesh. Falling Indian domestic prices resulted fall in export offers.

-- Neelachal Ispat Nigam Limited (NINL) - India's largest pig iron manufacturer & exporter has reduced its steel grade pig iron prices by INR 500/MT (USD 7) & latest offers for steel grade pig iron floated at INR 26,900/MT (USD 382), ex-plant, Cuttack, Odisha (eastern India).

-- During May'19, NINL clocked hot metal output of 55,710 MT & Pig Iron at 47,050 MT. Meanwhile in Apr'19 the company reported hot metal production of 63,090 MT & Pig Iron output of 56,063 MT. On monthly premises company's pig iron output fell by 16% in May'19.

-- Jindal Steel has reduced prices by INR 300/MT and offering steel grade pig iron at INR 27,800/MT ex-Raigarh & panther shots (granulated pig iron) at INR 26,700/MT ex-Angul, Odisha. As per officals more than 3,000 MT pig iron sold at revised price range.

-- SteelMint's Pig iron export price assessment stood at USD 370-375/MT FoB India, USD 324-326/MT FoB Brazil & USD 325-330/MT FoB Black sea.

FINISH LONG STEEL

Indian Finish long steel market remained dull across regions and trade volumes couldn't absorb the sufficient space through medium/small scale mill as well as large scale mills.

Limited buying inquiries and acute liquidity crunch narrowed down the price range by around INR 500-1,000/MT across regions as per commodity (rebar/structure).

-- Current trade reference rebar prices (12-25 mm) assessed at INR 34,000-34,200/MT Ex-Raipur & INR 35,200-35,500/MT Ex-Jalna; prices are basic & excluding 18% GST.

-- On the other hand, Southern India based state owned RINL, known as (Vizag Steel Plant) has reduced the Finish long as well as Semi-finish steel prices by around INR 1,500-2,000/MT w.e.f. 15th Jun'19 and current Rebar (12 mm) trade reference price registered at around INR 39,700-40,000/MT, ex-Chennai (Stock Yard) & excluding 18% GST.

-- Central region, Raipur based heavy structure manufacturers trade discount inched up by INR 100-200/MT to INR 700-800/MT against last week and current trade reference prices at INR 37,800-38,100/MT (200 Angle) ex-work.

-- Trade discounts in Raipur Wire rod more or less firm this at INR 1,300-1,500/MT as against last week at INR 1,400-1,600/MT. In line, basic prices in Durgapur narrowed down by INR 1,200/MT to INR 34,500-35,300/MT ex-plant & in Raipur it lessened by INR 400/MT to INR 35,500/MT ex-plant; Size 5.5 mm.

FLAT STEEL

Major Indian steel mills raised flat steel prices by INR 750-1,000/MT in HRC/CRC announced by steel mills towards the beginning of this month. Although it doesn't seems to have been absorbed in traders market amid limited trades and dull demand from automobile sector.

This week domestic HRC prices continued to remain sluggish owing to lackluster demand and slowdown in trading activities in domestic market.

-- Currently HRC (2.5-8mm, IS2062) prices in traders market is around INR 41,000-41,500/MT ex-Mumbai, INR 40,700-40,800/MT ex-Delhi & INR 43,500-44,000/MT ex-Chennai. Meanwhile, CRC (0.9mm,IS 513) prices in traders market is around INR 46,000/MT ex-Mumbai, INR 45,500/MTex-Delhi & INR 49,000/MT ex-Chennai. Prices mentioned above are basic & excluding 18% GST.

Few trade sources shared that, increased prices were difficult to absorb in domestic market over tedious buying. Trade segment reported sluggish demand and weak buying interest amid pessimistic sentiments prevailing in domestic market.

Meanwhile Japanese and Korean mills have reduced their HRC export offers for India by around USD 10-15/MT and offering at USD 525-530/MT CFR Inda. Thus cheaper HRC imports arriving from Japan and Korea results to domestic HRC prices under pressure as global prices witness significant decline amid softening overseas demand.

Reference Prices as on 15th June 2019 (Week 24)

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

Indian Export Reference Prices as on 15th June'19

Prices in USD/MT
Source: SteelMint Research