Indian Steel Market Weekly Snapshot

Indian steel prices remained on down-trend during the week-27 (29th Jun-6th Jul) on demand concerns amid monsoon & awaited announcement of Union budget. As per producers, inventory levels continued to remain, hence there was significant drop in prices.

As per assessment, this week prices of Sponge iron drop by INR 300-800/MT, Billet by INR 300-1,300/MT followed by Rebar INR 500-1,000/MT with major fall in Western region.

In line Finished Flat steel products, the prices narrowed down by INR 500/MT (USD 7).

Participants believe that, prices of Semis products less likely to find support due to healthy inventory of Finished products with the mid sized mills. Also as the monsoon arrived in the nation, there is less scope for boost in domestic steel demand.

IRON ORE & PELLETS

NMDC has kept floor prices for upcoming Karnataka e-auctions unaltered in July'19. Odisha iron ore prices remain unchanged for this week also.

-- Southern India (Bellary) pellet offers hit 10-months low amid weak P-DRI prices. Pellet makers have lowered pellet offers by INR 600-700/MT (W-o-W) to INR 6,200-6,300/MT.

-- SteelMint assessment for pellets stands at INR 6,800-7,000/MT ex-Raipur against last week's offer at INR 6,800/MT. Durgapur (eastern India) SteelMint's reference pellet price assessment stands at INR 6,500-6,600/MT (delivered) in line with last week assessment.

-- Southern India based pellet maker - KIOCL had concluded pellet export deal this week. The company had floated export tender offering 50,000 MT pellet consisting of Fe 64% content with less than 2% Al. The deal was concluded at around USD 127-129/MT, FoB India basis.

-- India's largest Blast Furnace (BF) at Angul plant of JSPL has produced its highest ever hot metal production of 10,845 MT for a single day on Tuesday.

COAL

Australian premium hard coking coal prices have fallen further this week as sellers lowered their offers to raise demand. Chinese steelmakers remained cautious of the bearish steel outlook, considering possibilities of adhoc production cuts in H2 2019. Moreover, import restrictions and currency volatility kept steelmakers at the sidelines.

Indian market activity remained muted, with no fresh offers heard. India's seaborne buying interest will stay tepid until September, as buyers are well stocked due to their active pre-monsoon procurement. Latest offers for the Premium HCC grade are assessed at around USD 189.75/MT FOB Australia and USD 203.50/MT CNF India.

-- Rashtriya Ispat Nigam Limited (RINL), the corporate entity of the Visakhapatnam Steel Plant (VSP) commissioned its new coke oven battery 5 project complex on July 5, 2019 with the light-up of the chimney of the battery, built at an investment of INR 2500 crore.

SCRAP

Indian imported scrap trades remain very limited on non-viability of imports amid negative domestic market sentiment and low prices of other substitutes like domestic scrap and sponge iron. Imported scrap offers increased following the global uptrend, while industry was looking for the national budget outcome announced on 5th July.

Assessment for containerized Shredded from the UK and Europe stands at USD 318-323/MT, CFR Nhava Sheva, up USD 5-7/MT against last week, with no major deals reported. Dubai origin HMS assessed at USD 315-320/MT CFR amid buying interest remaining significantly lower levels. West African HMS offers assessed at around USD 285-295/MT, CFR and South African HMS sold at around USD 305-310/MT, CFR.

Few participants remained apprehensive on successive fall in domestic steel price and ongoing monsoon season with no strong reason to support scrap imports even in the short term.

SEMI FINISHED

Indian Billet offers slashed by INR 200-1,300/MT (USD 3-19) across the country on account of mis-match trade cycle, where supply healthier although demand is slow in domestic & exports as well.

Following the trend, Sponge iron prices being fall by INR 200-800/MT (USD 3-12) across regions on account of limited inquiries.

-- In Raigarh, Central India 50% (12 hrs) power cut continues by Jindal power ltd (JPL) since 2nd Jul'19 due to technical breakdown.

-- India's mid sized mills export offers to Nepal drop significantly and stood at around USD 400-405/MT for Billet (100*100 mm) & USD 465-470/MT for Wire rod (5.5 mm), ex-mill at Durgapur.

-- RINL had invited tender for export of 10,836 MT Billets and 5,418 MT Wire Rod on 27th Jun'19 whose due date for bid submission was 2nd Jul'19 has cancelled due to low bids than their expectations.

-- Indian Sponge iron export offers to Bangladesh fall further and currently hovering at USD 275-280/MT CPT Benapole(dry port of India & Bangladesh) equivalent to USD 290-295/MT CNF Chittagong, Bangladesh.

-- Neelachal Ispat Nigam Ltd (NINL)- India's largest and state owned steel grade pig iron manufacturer & exporter has sharply reduced its pig iron prices for steel grade by INR 1,500/MT (USD 22) to INR 25,400/MT(USD 371), w.e.f. 5th Jul'19.

-- SAIL's Rourkela Steel Plant tender held on 5th July'19 to sell about 3,800 MT steel grade pig iron & had received weak response. The base price for the tender was quoted by RSP at INR 26,600/MT which is down by INR 650/MT (USD 9.5) as against previous auction and near about only 5% (200-300 MT) material sold.

FINISH LONG

Indian Finish long steel market observed thin trades which ultimately narrowed down rebar price range by INR 500-1,000/MT through the major supplying regions amid rising inventory levels.

-- Current trade reference rebar prices (12-25 mm) assessed at INR 31,800-32,000/MT Ex-Raipur & INR 33,100-33,400/MT Ex-Jalna; prices mentioned are basic & excluding GST.

Further, one of the state owned large mill in south region has roll over the prices for July deliveries and current trade reference rebar (12 mm) price registered at INR 39,500-40,000/MT Ex-Chennai (Stock Yard), as per trade sources.

-- Central region based heavy structure manufacturers have maintained trade discount at INR 800-1,000/MT against last week and trade reference prices stood at INR 36,800-37,200/MT (200 Angle) ex-work and the basic offers fell by INR 400-600/MT in most of the regions on W-o-W basis.

-- Trade discounts in Raipur Wire rod slightly raised by INR 100-200/MT to INR 1,400-1,600/MT with fresh offers stands INR 32,900-33,600/MT ex-Raipur & at INR 32,300-33,000/MT ex-Durgapur, size 5.5 mm.

FLAT STEEL

This week Indian HRC prices declined further in few key markets amid inactive demand and bearish market sentiments prevailing in domestic market. Meanwhile approaching monsoon season will lead to slowdown in construction and infrastructure activities and weak demand from auto sector have weighed down domestic steel prices.

On weekly basis domestic HRC prices softened by INR 500/MT. SteelMint's HRC (2.5-8 mm, IS2062) trade reference prices is around INR 40,000/MT ex-Mumbai and INR 39,500/MT ex-Delhi. The CRC (0.9 mm, IS 513) trade reference prices is around INR 45,000/MT ex-Mumbai and INR 42,500-44,500/MT ex-Delhi. Prices mentioned above are basic and extra GST@ 18% will be applicable.

However Indian steel mills indicated roll over in flat steel prices for this month however official announcement is still awaited.

-- POSCO Maharashtra has signed a Memorandum of Understanding (MoU) with Essar Steel to buy 1 MnT of Hot-rolled coil (HRC) worth INR 5000 cr.

-- Rourkela Steel Plant has invited a tender for the sale of 10,000 MT Prime Mild Steel Hot Rolled Plates(Non-Alloy/Micro Alloyed). The due date for submitting the bid is 09 July'19.

Reference Prices as on 6th July 2019 (Week 27)

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

Indian Export Reference Prices as on 6th July'19

Prices in USD/MT
Source: SteelMint Research