South India: Active demand, buying interest bolster market this week

Sponge iron PDRI (FeM 80%) prices in Bellary were assessed by SteelMint at INR 30,100/tonne (t) exw (+INR 550/t), and CDRI at INR 31,200/t exw (+INR 250/t) w-o-w. Total sponge iron trade volumes concluded this week (PDRI and CDRI combined) were at 48,350 tonne.

Since end-uers expressed interest in procuring sponge iron, a sizable number of bookings were made this week, and offers rose to INR 30,100/t exw , up by INR 550/t. Maharashtra and the southern region both experienced material movement w-o-w.

Market highlights

• Higher offers were maintained by suppliers on increased demand for billets and improved movement in finished steel. With significant spot market demand, billet prices in the Hyderabad region increased.
  
  
• In finished long, current quotes for rebar were raised by INR 1,000/t w-o-w to INR 50,000-50,500/t exw (size 12-25mm, IF route, Fe 500, IS 1786) but are likely to remain range-bound.
  
  
• Since mills have been maintaining a moderate level of production, their stockpiles have not risen to worrisome levels and may remain under control in the near future.
  
  
• Non-coking coal prices remained volatile. After a rise over the last few weeks, a drop is being witnessed. However, going forward, concerns over coal supplies have been addressed as sponge production picked up.
  
  
• In Chennai market, semi-finished steel prices were up slightly w-o-w despite raw material prices being range-bound, particularly melting scrap while the finished steel sales momentum is yet to pick up. Additionally, some imported bulk scrap arrived in the local market, securing supplies for steel manufacturers for the coming days.
  
  

Outlook

Demand for steel will likely be strong in the coming month and this will keep markets active. Offers are likely to be range-bound. Raw material availability is also expected to remain high, as per reliable sources.