Indian Steel Market Weekly Snapshot

Indian steel market observed sharp surge in prices in the last week of CY19 on account of improved domestic demand amid high cost of raw materials.

Further the participants are hopeful that the prices are likely to remain supported looking at healthy bookings in hand and lessened conversion spread (margins) with the standalone mills.

As per SteelMint assessment, the prices of Semis products have surged by INR 800-1,700/MT (USD 11-24) & Finished Long steel by INR 1,000-2,500/MT (USD 14-35). Also, the Flat steel prices have increased up to INR 1,000/MT (USD 14) this week.

IRON ORE and PELLETS

Currently, no changes in the iron ore offer from miners after price hike last week. This week Gonua Iron ore and Manganese mines located in Koira sector (Odisha) received enhancement in its iron ore production from 0.36 MnT pa to 1.20 MnT pa. As per the SteelMint sources, Odisha merchant miners expected to hike iron ore prices next month.

-- PELLEX remains stable at INR 6,650/wmt (DAP Raipur) amid thin buying at increased offers by pellet maker last week. Pellet deals at the minimal quantity (around 2,000 MT) reported from Raipur market at INR 7,000/MT ex-plant this week. Raipur based pellet offers stable at INR 7,000/MT ex-plant.

-- Sources reported, Durgapur based pellet maker has concluded around 2,000 MT pellet deal yesterday at INR 6,500/MT (EXW). However, Current offers for Durgapur increased by INR 200/MT to INR 6,600-6,800/MT EXW.

-- Bellary based pellet makers have sold around 30,000 MT at the range of INR 6,400-6,700/MT EXW this week amid increased offers.

-- One Pellet export deal was heard this week from Odisha based pellet maker at around USD 113/MT, CFR, China. However, SteelMint Pellet export assessment for the regular grade (Fe 64% and 3% Al) stands at USD 101-102/MT, FoB India. Few pellet offers are heard at USD 115/MT, CFR China, however, amid year-end holidays market remains silent.

COAL

Australian premium hard coking coal prices were mostly unchanged during the Christmas holiday period, without any fresh spot activity, as market participants awaited Chinese Q1 long term prices from Shanxi. The seaborne market demand continues focusing on February-loading cargoes in the premium hard coking coal segment. In the meantime, however, a number of end-user tenders took place this week in China, for premium hard coking coal and port stocks.

Chinese domestic coking coal prices are anticipated to hold steady for Q1 2020, particularly for premium hard coking coal with low ash and sulfur from Shanxi. Shanxi Coking Coal Group, China's biggest coal producer, is expected to shortly announce its Q1 long-term price.

-- Latest offers for the Premium HCC grade are assessed at around USD 136.00/MT FOB Australia, USD 149.50/MT CNF China and USD 149.30/MT CNF India.

FERROUS SCRAP

Imported scrap trades to India showed improvement this week, as market observed several container bookings for HMS scrap in spite of the continued rise in global offers due to recent positive trend in billet sales and prices, while the market expects further improvement in buying from next month onwards.

-- SteelMint assessment for containerized Shredded from the USA and UK to India rose sharply to around USD 315/MT, CFR Nhava Sheva, up by USD 5-6/MT against last week, with just a few small quantity bookings reported. No shredded offers from North European yards were received due to holidays, some yards in Europe refrained from offering to India on good business from their domestic buyers.

-- South African origin HMS was sold at USD 300/MT CFR Nhava Sheva and Mundra with fresh offers now reached at USD 305-308/MT CFR. HMS 1 super (no ci gi) was booked at USD 300/MT CFR Nhava Sheva with average trades, while offers now in USD 300-305/MT CFR range. HMS 1&2 of good quality from South American origins was sold at USD 295/MT CFR, however, fresh offers are now close to USD 300/MT. West African origin HMS 1&2 was at around USD 290/MT in latter half this week.

SEMI FINISHED

Semi finished steel market showed improvement on a weekly basis, domestic sponge iron offers moved up by INR 800-1,400/MT & Billet prices upto INR 1,700/MT.

-- Indian sponge iron export offers to Bangladesh further surge due to hike in domestic prices and latest offers reported at USD 290-295/MT CPT Benapole, equivalent to USD 305-310/MT CFR Chittagong, Bangladesh.

-- Indian large mills hold export offers to Nepal, however deals through the mid scale mills for billet (induction grade, 100*100 mm) reported at around USD 405/MT ex-mill at Durgapur, this is equivalent to USD 425-430/MT CPT Nepal.

-- SAIL has concluded an export tender for 16,000 MT prime mild steel non-alloy concast billets (size 105*105 mm) from Bhilai Steel Plant at around USD 425/MT, FoB, whose due date was 23 Dec'19- Sources.

-- TATA Metaliks has raised basic (steel) grade Low Silicon (1-1.5%) pig iron price by total of INR 1,500/MT in last 7-10 days and fresh offers reported at INR 26,500/MT (USD 372) ex-plant, Kharagpur, eastern India.

FINISH LONG

Finish Long Steel market maintained upward direction from last couple of weeks amid surging raw material prices along with positive sentiments and overall average rebar price range enlarged by INR 2,000/MT with sufficient future trade volume till next week which is observed through major regions.

Further, west region based (Jalna & Goa) rolling mills have slightly increased rebar guage parity by INR 200/MT to INR 2,500/MT for 10 to 25 mm, 8 mm & 32 mm will be INR 3,500/MT. while the same range notified in south region Hyderabad market i.e. INR 200/MT to INR 2,700/MT from 10-25 mm & INR 3,700/MT for 8 mm along with increase in loading charges by INR 50/MT to INR 200/MT.

Trade associates assuming that price range might get sustain amid healthy bookings which is being notified by traders end and higher raw materials will keep finished steel prices in a range-bound for the near term.

-- Current trade reference rebar prices (12-25 mm) through mid-sized mills assessed at INR 32,500-32,800/MT Ex Raipur (central region) & INR 34,800-35,200/MT Ex-Jalna (western region), INR 34,600-34,900/MT Ex Chennai (south region).

-- Central region, Raipur based heavy structure manufacturers have maintained their trade discount by INR 1,000-1,400/MT and Current trade reference prices at INR 36,500-36,900/MT (200 Angle) ex-work and price range increased by INR 1,600-1,800/MT W-o-W.

-- Trade discounts in Raipur wire rod is currently at INR 1,000-1,100/MT and trade reference prices stood at INR 33,100-33,300/MT ex-Raipur and INR 33,100-33,200/MT ex-Durgapur, size 5.5 mm.

FINISH FLAT

This week domestic HRC prices witnessed increase by around INR 500-1,000/MT in traders market. Meanwhile SteelMint reported last week that major Indian steel mills are likely to announce hike of INR 1,000-1,500/MT (USD 14-21) in Jan '20.

Thus, current trade reference prices for HRC stands at INR 36,000-37,000/MT ex-Mumbai & INR 36,000-37,500/MT ex-Delhi. Meanwhile, CRC (0.9 mm, IS 513) prices on a weekly premise assessed at INR 41,500-42,000/MT ex-Mumbai & INR 41,000-42,000/MT ex-Delhi. The prices mentioned above are basic & GST@ 18% will be applicable.

Traders already raised flat steel prices this week on anticipation of increase in Jan'20. Also absence of imports to India from major exporting nations and hindrance in supplies in few regions amid maintenance shutdown in major steel mill based in western region can be attributed to increase in domestic HRC prices in Jan'20.

Along with this, increase in Indian HRC export offers to overseas buyers provide enough motivation to Indian steel mills to raise prices in the domestic market.

Reference Prices as on 28th December 2019 (Week 52)

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

Indian Export Reference Prices as on 28th Dec'19

Prices in USD/MT
Source: SteelMint Research