Indian Steel Market Weekly Snapshot

During the week-44 (26th Oct-2nd Nov'19), Indian domestic trade activities were better than the earlier as prices find support with improved spot trades. Also as per manufacturers, inventories have narrowed down this week.

As per SteelMint's assessment, during the week prices of Semis & Finished long steel products gain by INR 100-500/MT (upto USD 7). Inline, the Flat steel prices surge by INR 500-750/MT (USD 7-11) through major mills.

IRON ORE & PELLETS

Odisha based merchant miner has kept the iron ore lumps & fines prices stable. No changes made from the miners end during this week. As per sources, SteelMint learned to know that, NMDC may revise prices next week.

-- PELLEX (DAP Raipur), Fe 63.5% stable at INR 5,900/wmt & 20,000-25,000 MT raw pellet deals reported in the last couple of days.

-- Jindal SAW decreased pellet (Fe 63%) offers by INR 150/MT to INR 7,900/MT (delivered Kandla) W-o-W.

-- Pellet price has dropped marginally to INR 5,300/MT as against INR 5,400-5,500/MT (ex-Durgapur, GST extra) W-o-W. Inline, Southern India (Bellary) based pellet makers witnessed a slight drop in prices to INR 6,100-6,300/MT ex-Bellary.

-- Two Pellet export deals were reported to China this week. East India based Pellet makers concluded deal of Fe 64% grade & 3% Al at around USD 89-90/MT, FoB India equivalent to USD 102/MT CFR China.

COAL

Australian premium low-volatile (PLV) hard coking coal prices have resumed falling this week, as lower offers emerged due to continued lack of demand from markets outside China.

Presently, the Chinese spot market has been silenced as a result of tightened restrictions at Southern China's Guangzhou and Fujian ports. Elsewhere outside China, end-users remain on the sidelines awaiting clearer direction of prices.

Several market sources predict that the seaborne coking market may soften further in November, particularly prices for the PLV segment. But in December, buying activity from China will possibly pick strength with fresh import quotas for 2020.

Latest offers for the Premium HCC grade are assessed at around USD 145.00/MT FOB Australia and USD 159.05/MT CNF India.

FERRO ALLOY

-- Silico Manganese prices have been at the lowest levels in two years. Prices are likely to fall further in line with falling ore prices in the domestic and seaborne markets.

-- Ferro Manganese prices are falling amid low demand in the domestic and global markets. Prices are likely to go further down in line with falling ore prices and sluggish demand.

-- Ferro Chrome prices fell down as there is little demand in the domestic and global markets. Buyers are pressurizing for lower levels and the suppliers are aggressive in clearing their stocks. However, with the increasing ore prices and falling alloy prices, the market seems difficult for the producers to run efficiently.

-- Ferro Silicon prices increased this week as there is a shortage of supply in the major producing regions. In the domestic market, the prices from Bhutan and Guwahati both remained firm at INR 63,000/MT Ex-plant.

FERROUS SCRAP

Imported scrap offers to India moved up sharply for another week on global uptrend, however, no major deal for containers was reported this week due to mismatch in buyers' bids and offers from suppliers.

-- SteelMint's offers for containerized Shredded from the UK, Europe and USA to India has climbed up to USD 280-285/MT, CFR Nhava Sheva, rising by USD 10/MT against last week, while lower buying interest has kept trades minimal.

-- HMS 1 (super) from Dubai now being offered at around USD 267-270/MT CFR while HMS 1&2 (with ci & gi) from Dubai was being offered at around USD 262-265/MT CFR. Amid limited inquiries, European origin HMS 1&2 (80:20) offers now stand range bound at USD 255-262/MT CFR Nhava Sheva, as per quality, while high quality South African origin HMS 1 offers were reported at around USD 270/MT CFR.

SEMI FINISHED

On a weekly basis, Indian Semis market showed improvement, in which domestic Sponge iron offers surge by INR 100-400/MT & Billet by INR 200-600/MT (USD 3-10).

Meanwhile, pig iron prices remained volatile on average demand-supply and the prices fluctuated by INR 200-400/MT in major locations of Central & Eastern India.

As per sources report to SteelMint, the major sponge manufacturers in Raipur & Durgapur have healthy orders in hand. Similarly in Odisha where renowned mills have future bookings for domestic & exports as well.

-- Indian sponge iron (80 FeM, 100% lumps) export offers up by USD 10/MT W-o-W & stood at around USD 260-265/MT CPT Benapole, equivalent to USD 275/MT CFR Chittagong, Bangladesh.

-- As per sources in central India (Raipur), they have booked approximately 10,000-15,000 MT pig iron from SAIL's BSP for which offer was floated on 25th Oct'19 and the deal price learend at INR 23,200-23,300/MT ex-plant, which is equivalent to INR 23,600-23,700/MT FoR Raipur.

-- Indian medium scale mills export offers to Nepal surge by USD 5-10/MT in a week and reported at around USD 365-370/MT for Billet & USD 420/MT for Wire rod, ex-mill at Durgapur.

-- RINL has invited two bloom export tenders of size; 200*200 mm and 150 mm and quantity 20,000 MT and 30,000 MT respectively. Interested bidders can submit their bids till 04 Nov'19.

-- Vizag Steel cancels steel export tender to Nepal on limited participation, which was valid till 31st Oct'19. As per sources highest bid for Billet was at USD 350/MT & for WIRE ROD at USD 390/MT ex-mill.

-- The Environment Pollution Authority (Prevention & control) has issued a notice regarding public health emergency in Delhi & NCR region on 1st Nov'19, regarding suspension of construction activities in NCR region till morning 5th Nov'19.

FINISH LONG

Finish long steel market shows moderate response in terms of trade prospects and rebar price range has been inched up in over all regions except Bangalore market where rebar price calm down by INR 300/MT and rest of the regions observed a slight uptick by INR 100-400/MT.

Current trade reference rebar prices (12-25 mm) through secondary mills assessed at INR 29,800-30,000/MT Ex Raipur & INR 31,100-31,400/MT Ex-Jalna.

Further, few large scale mills have increased rebar prices by INR 500-1,000/MT in most of the regions amid positive sentiments and considering future booking through project supply.

Current trade reference rebar prices (12 mm) by large mills assessed at INR 34,800-35,300/MT Ex Mumbai.

Central region based heavy Structure steel manufacturers have slightly stretched trade discount by INR 700-1,200/MT and current trade reference prices stood at INR 33,700-34,000/MT (200 Angle) ex-work.

-- Trade discounts in Raipur wire rod is currently at INR 1,000-1,200/MT and trade reference prices stood at INR 30,300-30,800/MT ex-Raipur and INR 30,200-30,600/MT ex-Durgapur, size 5.5 mm.

FINISH FLAT STEEL

Major Indian mills have announced hike in flat steel prices by INR 500-750/MT for Nov deliveries and other mills are also planning to follow suit.

After hike, indicative price of major manufacturers was learned to be around INR 35,500/MT ex-Mumbai for HRC (2.5-8 mm, IS2062) and CRC prices (0.9 IS513 Gr O) is around INR 39,750-40,500/MT ex-Mumbai. Price mentioned above is basic and extra GST at 18% is applicable.

Thus lowered output in Q2 FY20 and absence of HRC imports can be attributed for recent hike in domestic steel prices. Further other trade sources shared that slight improvement in demand is expected post Diwali holidays. However other market participants are still skeptical about absorption of current price hike in the domestic market.

Indian steel mills raised HRC export offers- In conversation with market sources SteelMint heard that a major Indian steel manufacturer has booked HRC for exports to Vietnam for Nov-end Dec shipments. The deal concluded is for 50,000 MT of HRC (SAE 1006) at USD 422-425/MT CFR Vietnam.

Thus Indian steel mills have raised HRC export offers to Vietnam yesterday by USD 5-10/MT. Currently offers from Indian mills stands at USD 420-430/MT CFR Vietnam.

Reference Prices as on 2nd November 2019 (Week 44)

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

Indian Export Reference Prices as on 26th Oct'19

Prices in USD/MT
Source: SteelMint Research