Indian Steel Market Weekly Snapshot

Indian spot steel trades remained less than average, during the Week -38 (14-21 Sep'19). The producers have stated poor lifting amid limited fresh bookings.

As per SteelMint assessment, this week prices of Semi & Finished long steel products have declined by INR 100-600/MT (USD 2-9) through the mid sized mills.

Inline, the Flat steel prices drop further by INR 250-500/MT (USD 3-7) through the traders end owing to weak demand amid rising inventories.

IRON ORE and PELLETS

This week, NMDC announced a price cut in its iron ore fines and lumps by INR 200/MT, DR-CLO by INR 230/MT & ROM by INR 180/MT. Ministry of mines increases iron ore mining lease area cap in Odisha to 58 sq.kms. from earlier 10 sq.kms. Indian government has also taken a decisive step allowed Steel Authority of India Ltd (SAIL) to sell 25% of its total annual mineral production in the merchant market.

-- PELLEX down by INR 100/MT to INR 6,050/wmt (DAP Raipur) amid reduced pellet offers and low trade. Raipur based pellet maker decreased pellet offers by INR 200 to INR 6,000/MT ex-plant, & in Durgapur- pellet price increased to INR 5,700-5,800/MT (ex-Durgapur, GST extra).

-- No pellet export deal heard to be concluded this week. SteelMint assessment for pellet export Fe 64% grade (Al 3%) stands at USD 106/MT, CFR China.

COAL

Australian premium low-volatile hard coking coal prices have tumbled further since last week, although medium volatile prices have held almost steady over the same period. In China, no spot deals were concluded as most end-user buyers remain concerned about the governmental import controls.

The Indian market has been sluggish for quite some time now, largely in part due to the bearish downstream steel industry. Moreover, profitability for steel companies is expected to deteriorate in the midst of a slowing local consumption growth rate and a weakening global outlook.

-- Latest offers for the Premium HCC grade are assessed at around USD 143.75/MT FOB Australia and USD 159.85/MT CNF India.

FERROUS SCRAP

Imported scrap to India dropped again this week amid further global decline following the new Turkish bookings earlier. After a slight uptick in buying activity last week, continued fall in prices turned buyers cautious again.

Assessment for containerized Shredded from the UK/Europe and the USA stands at USD 260/MT, CFR Nhava Sheva, down by over USD 5/MT against last week, with only a few deals being reported. Amid low buying interest, some traders also offered at USD 2-3/MT lower. HMS 1 offers from Dubai also inched down to around USD 260/MT, CFR on slow demand, while UK origin HMS 1 was being offered at around USD 250/MT CFR. Few deals of West African origin HMS were reported at USD 245/MT CFR Goa, while HMS 1 of higher quality from South Africa was offered at USD 265/MT CFR Nhava Sheva.

-- Indian domestic Scrap prices dropped this week by around INR 300-600/MT W-o-W. The current assessment of local HMS 1&2 (80:20) stands at INR 21,100/MT (USD 297) ex Mumbai, down INR 600/MT against last week, while Chennai based HMS 1&2 (80:20) assessed at INR 20,300/MT ex-works.

FERRO ALLOYS

-- Silico Manganese prices are falling fast in the domestic market. Prices could go further down in line with tepid demand.

-- Ferro Manganese prices are falling in line with low demand. Producers are mostly dealing with regular buyers that are buying hand-to-mouth.

-- Indian Ferro Chrome prices have gone down in line with a sluggish Stainless Steel market. The prices may not sink further as the chrome ore prices remain firm.

-- Ferro Silicon Producers have had to reduce prices as the buyers are aggressively negotiating for lower prices amid little buying interest

SEMI FINISHED

On weekly basis, domestic Semis prices declined in major locations, in which Billet offers fell by INR 100-600/MT with major drop in South India - Hyderabad & Chennai by INR 500-600/MT. Meanwhile Sponge iron offers plunged by INR 100-300/MT, W-o-W.

However Pig iron prices in Indian domestic market remained volatile by INR 200-500/MT (USD 3-7) despite drop in local billet prices.

-- SAIL has floated an export tender for prime mild steel non-alloy concast 16,200 MT billets. The last date for bid submission was on 20 Sep'19.

-- SAIL recent has schedule a auction to sale of about 1,500 MT basic grade Pig iron on 23rd Sep'19 from its Rourkela Steel Plant (RSP).

-- RINL has invited a tender for export of 8,127 Billets, 8,127 MT Wire Rod and 5,418 MT Bloom to Nepal. Interested bidders can submit their bids till 24 Sept'19 at 14:00 hrs.

-- Jindal Steel has resumed sales & fresh offers reported for pig iron at INR 24,200-24,300/MT ex-Raigarh & panther shots (granulated pig iron) at around INR 22,500-22,700/MT ex-Angul, Odisha.

-- Indian sponge iron (80 FeM, 100% lumps) export offers learned at USD 275-280/MT CPT Benapole, equivalent to USD 295/MT CFR Chittagong, Bangladesh. As per sources a West Bengal based producer has concluded deal of 1,000-1,500 MT sponge iron at near to USD 278/MT CPT Benapole(dry port of India & Bangladesh).

-- Mid sized mills export offers to Nepal stood at around USD 380/MT for Billet & USD 430/MT for Wire rod, ex-mill at Durgapur, eastern India.

FINISH LONG

Indian Finish Long Steel market of medium and small scale mills observed mild response through the trade participants amid measured trade volumes this week and rebar price range lessened by INR 100-400/MT in most of the regions.

As per conversation with market participants, few unaccountable sales have been notified from the central and northern regions.

Meanwhile on short term future outlook, they believe that limited buying interest may put selling pressure particularly in Rebar & Structure Steel.

Whereas, western India based participants stated that minor supply movement exists but an appropriate movement needs to be frame, otherwise it will impact on production levels.

-- Current trade reference rebar prices of 12-25mm through the mid scale mills assessed at INR 31,000-31,200/MT Ex-Raipur & INR 31,500-31,800/MT Ex-Jalna.

-- Central region, Raipur based heavy structure manufacturers constantly reduced prices and trade discount reported at INR 300-500/MT. Current trade reference prices at INR 34,900-35,200/MT (200 Angle) ex-work.

-- Trade discounts in Raipur wire rod this week stood at INR 800-1,000/MT and trade reference prices at INR 30,500-30,800/MT ex-Raipur and INR 31,100-31,300/MT ex-Durgapur, size 5.5 mm.

Further it learned from the associates of large scale mills that, stockiest demand is considerably low amid liquidity burden where payment cycle is getting delayed. Hence anticipations are high among them for minor price corrections in near term. Meanwhile whole market is assuming for positive sentiments on expected improve demand due to upcoming festival (Diwali) which is being scheduled for next month.

-- Current trade reference rebar prices of 12 mm through the large scale mills assessed at INR 34,000-34,500/MT Ex-Mumbai, excluding 18% GST.

FINISH FLAT

Liquidity crunch, increased inventories and inactive demand resultant to continual fall in HRC prices in domestic market.

This week domestic HRC prices witnessed slight decline by INR 250-500/MT in traders market. As per SteelMint price assessment trade reference prices for HRC (IS2062,2.5-8 mm) is currently at INR 35,000-36,000/MT ex-Mumbai, INR 35,000-36,000/MT ex-Delhi and INR 37,000-38,000/MT ex-Chennai. And the domestic CRC (0.9 mm, IS 513) trade references prices on weekly basis are hovering around INR 40,000-41,000/MT ex-Mumbai, INR 39,500-40,500/MT ex-Delhi and INR 41,000-43,000/MT ex-Chennai. Prices mentioned above are basic and extra GST@ 18% will be applicable.

Rebound in domestic demand is anticipated with the arrival of festive season starting in the month of Oct'19. Also an uptick in market sentiments is expected since monsoon season is approaching to its end.

Thus Indian steelmakers are aggressively exporting HRC to Vietnam & other markets owing to prolonged weakness prevailing in domestic market.

Reference Prices as on 21st September 2019 (Week 38)

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

Indian Export Reference Prices as on 21st Sep'19

Prices in USD/MT
Source: SteelMint Research