Weekly: Indian Steel Market Snapshot

During week 20, Indian domestic trade activities improved. The mid sized steel mills reported better response from the buyers despite assumptions of uncertain directions.

As per SteelMint's assessment, in these days the Billet prices increased upto INR 700/MT & Rebar by INR 500-2,000 (USD 7-27)/MT. However, sponge iron prices declined by INR 100-300/MT owing to strong supply & limited demand as most of the standalone furnaces' are still shut down in major markets.

In context to flat steel, the prices in the trade segment fell by INR 500/MT, W-o-W.

FERROUS SCRAP

India's imported scrap market was taken by surprise when the UAE government's decision to suspend scrap exports was reported yesterday. At a time when steel mills are gradually opening again and look to make fresh bookings in the coming weeks, an export ban from India's largest scrap supplier (UAE) is likely to impact the purchase pattern of Indian mills.

According to several global traders, UAE mainly shipped HMS scrap to Murdra, Nhava Sheva and Kandla port, and the mills in these regions will be the most impacted who will have to depend even more on UK/Europe origins now, where scrap availability is still low, hence offers are bound to move up in coming weeks, as per SteelMint's sources.

SteelMint's assessment for Shredded scrap from Europe and North America stands mostly stable at USD 270/MT CFR Nhava Sheva, although no firm bids are available in the market and most of buyers admitted to not having returned in the market for new deals as yet. In absence of buying inquiries from India, traders are offering good quantities to Pakistan at similar price levels.

SEMI FINISHED

On a weekly basis, Indian Semi finished steel (Billet) prices surged by INR 200-700/MT over disruption of supply chain as demand was quite strong, while supply was less than average, as stated by participants.

-- Induction grade billet export offers up by USD 5/MT to USD 355/MT ex-mill at Durgapur, equivalent to USD 385/MT CPT Nepal.

-- Bangladesh based major steel mills have booked about 6,000-7,000 MT Indian sponge iron (100% lumps & 80% FeM grade) at USD 265-267/MT CFR Chittagong.

-- SAIL's Bhilai Steel Plant (BSP) in Central India offered 16,000-18,000 MT pig iron at INR 22,700-22,800/MT EXW. Trade discount being offered of INR 100-300/MT on bulk bookings.

-- SAIL has floated an export tender for 30,000 MT Mild Steel Concast Slab from its Bhilai Steel Plant. Offer must be valid upto 20 May'20. The company also floated another export tender for 30,000 MT Mild Steel Concast Slab from its Bokaro Steel Plant. Offer must be valid upto 16 May'20.

FINISH LONG

The Finish Long Steel market observed disturbed supply movement due to inadequate workforce and rebar trade prices have rallied up to INR 2,000/MT, as per weekly comparison.

Further, production level seems evolving across the regions and supply movement will ease in the near term and few specific trade associates based in particular markets anticipate minor corrections might get placed in coming days.

However, Western region based (Jalna), one of major supply markets observed selling pressure and a couple of known brands have reduced their rebar prices by INR 1,000/MT in the last couple of days.

-- Current trade reference rebar prices (12-25 mm) through mid sized mills assessed at INR 33,700-34,000/MT Ex-Raipur (Central region) & INR 36,100-36,600/MT Ex-Chennai (Southern region).

-- Raipur based heavy structure manufacturers have maintained trade discounts of INR 400-700/MT and trade reference prices hovering at INR 34,600-35,000/MT (200 Angle) ex-work.

-- Trade discounts in Raipur wire rod are currently assessed at INR 300-500/MT and trade reference prices stood at INR 31,100-31,300/MT ex-Raipur and INR 31,400-31,600/MT ex-Durgapur, size 5.5 mm.

FINISH FLAT

Indian domestic HRC prices in the trade segment have witnessed a fall of around INR 500/MT W-o-W in a few major markets like Mumbai, Faridabad and Chennai.

Although the steel markets have partially resumed activities across India with the easing of lockdown regulations, however, only 10-25% of trades are happening in different regions, as stated by the market participants.

-- Currently, the domestic HRC (IS 2062, 2.5 - 8 mm) price stands at INR 37,000-37,500/MT ex- Mumbai, INR 37,000-37,500/MT ex-Faridabad & INR 38,500- 39,500/MT ex- Chennai.

-- Meanwhile, CRC prices fell by INR 1,500-1,700/MT W-o-W in the Mumbai region & assessed at INR 42,500-43,500/MT ex- Mumbai and INR 43,500-44,000/MT ex- Chennai. All prices mentioned above are basic, and extra GST @18% is applicable.

Further, sources anticipated that the demand will pick up gradually as the market conditions improve with the subsiding effect of COVID-19 spread and related lockdown.

In May'20, Indian steel mills announced roll over in steel prices and exported aggressively to Vietnam and China for June deliveries at lower prices. However, later last week mills raised HRC export offers by USD 5-10/MT.

Reference Prices as on 16th May 2020 (Week 20)

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

Indian Export Reference Prices as on 16th May'20

Prices in USD/MT
Source: SteelMint Research