Weekly: Indian Steel Market Snapshot

During the week-23, Indian domestic steel trade activities remained subdued. The mid sized steel mills reported mixed response from the buyers over uncertain market direction.

As per SteelMint's assessment, prices of rebar & billet surged upto INR 900 (USD 12)/MT across major markets except in south & western India, where price corrections were reported in the same range. Although, sponge iron prices fluctuated by INR 100-300/MT, W-o-W. Flat steel prices in the trade segment fell further by INR 300-500/MT (USD 4-7) through the traders end.

IRON ORE and PELLETS

Steel Authority of India (SAIL) concluded 40,000 MT out of 100,000 MT iron ore fines offered from its Bolani iron ore mines yesterday (5th Jun'20) at INR 1,500/MT (loaded to rake; Royalty, DMF, NMET & other taxes extra). Odisha's state-owned miner- OMC Iron Ore Lump e-auction fetches good response with 90% material sold and bids received upto INR 900/MT over the set base price.

On the other hand, Odisha merchant miners kept the iron ore lumps and fines prices unchanged this week.

-- PELLEX remains stable at INR 6,000/wmt (DAP Raipur) this week amid weak market sentiments. Raigarh based pellet makers have maintained prices stable at INR 5,600-5,700/MT ex-plant. Bellary based pellet makers have sold around 40,000 MT pellets at around INR 6,000-6,200/MT ex-plant. Durgapur pellet offers increased to INR 6,000/MT, however trades are yet to be concluded at increased offers.

-- At the mid of this week, Raipur based major pellet maker had concluded a pellet export deal for around 55,000 MT (low Alumina) at around USD 117/MT CFR, China.

-- However, SteelMint assessment for Fe 64% grade pellets with 3% Al stable this week at around USD 113-115/MT, CFR China same as against last week assessment.

COAL

Australian premium low-volatile (PLV) hard coking coal (HCC) prices have decreased moderately amid thin trading, with buyers staying on the sidelines.

The Chinese market observed limited activity as buyers reassessed their plans for procuring seaborne coal cargoes, in anticipation of further tightening of port-related policies. A number of ongoing negotiations were seen in the spot market for the premium low- to medium-volatile hard coking coal and pulverized coal injection segment.
Indian buyers are still consuming their long-term contract cargoes. Spot demand and inquiries for seaborne coking coal from India is unlikely to revive before September this year.

-- Latest offers for the Premium HCC grade are assessed at around USD 109.75/MT FOB Australia, USD 118.00/MT CNF China and USD 119.65/MT CNF India.

FERROUS SCRAP

Imported scrap offers to India moved up this week, following the strong trend at global level, while some inquiries were heard from buyers in West and South India, but after the few bookings reported last week, no major fresh trades have concluded in the recent days.

-- SteelMint's assessment for Shredded 211 scrap from North America and Europe origins to India, stands in the range of USD 286-290/MT CFR Nhava Sheva, up by USD 10/MT against last week. However, most buyers are less interested in procuring imported Shredded due to high offers, and majorly inquiring about HMS grades.

-- HMS 1 from South Africa was last week sold to Nhava Sheva and Mundra at USD 265/MT in 3-4 different deals, however this week, the fresh offers for the same are at least USD 275/MT CFR Nhava Sheva, with some sources putting it even higher.
Although no offers from South Africa were lesser this week. HMS 1&2 (80:20) from UK are being offered at USD 265/MT CFR.

FERRO ALLOYS

-- Silico Manganese prices fell throughout the week in both Raipur and Durgapur due to dull demand in the domestic and export market. Meanwhile, export prices also dropped W-o-W.

-- Ferro Manganese prices decreased due to low demand in both the domestic and export market.

-- Prices of Ferro Chrome increased in the domestic market owing to the increase in Chinese prices. Demand in the domestic market remains dull.

-- Indian Ferro Silicon prices fell due to dull demand in the domestic market. Meanwhile, the export market remained near to absent.

SEMI FINISHED

On a weekly basis, Indian billet market observed average inquiries on fluctuating prices and the price range surged by INR 100-900/MT with major hike of INR 600-900/MT in north India. However in western India prices dropped in the same proportion. Similarly, sponge iron offers fluctuated by INR 100-300/MT, W-o-W.

-- Sponge iron export offers unchanged this week at USD 270-275/MT CFR Chittagong, Bangladesh. No fresh deals reported by suppliers due to volatile domestic offers along with limited inquiries.

-- Pig iron prices increased by INR 100-300/MT in the central region due to supply shortage, while it was firm in remaining locations on balanced supply-demand.

-- Few deals for billet exports reported through the mid-scale mills at around USD 373-375/MT ex-mill at Durgapur, equivalent to USD 400-405/MT CPT Nepal. While primary mills export offers stood at USD 380-390/MT EXW, equivalent to USD 400/MT CPT Nepal, via rake delivery.

-- Steel Authority of India Ltd. - a government of India Company has floated an export tender for 18,900 MT Mild Steel Non Alloys Concast Billets from its Durgapur Steel Plant, West Bengal. The offers are valid till 8th Jun'20.

-- Vizag Steel Plant has rolled out billets of 125*125 mm size for the first time from its Medium Merchant Structural Mill (MMSM) by modifying its Roll Stands to meet the increasing demand.

FINISHED LONG

Indian Finish long steel market observed limited trade activities as well as inadequate future bookings where rebar prices fluctuated upon region wise, as per weekly assessment.

The prices in most regions remained upside except West and Southern regions where prices contracted upto INR 800/MT and rest of the markets notified a price hike upto INR 900/MT through medium and small scale mills.

-- The trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 34,800-35,100/MT ex-Raipur, INR 35,200-35,600/MT ex-Jalna & INR 35,800-36,200/MT ex-Chennai.

-- Raipur based heavy structure manufacturers have mutually discussed to vanish healthy trade discounts and to offer firm prices from onwards. The trade reference prices for 200 Angle is at INR 35,600-35,800/MT EXW.

-- Trade discounts in Raipur wire rod are currently reported at INR 400-600/MT and trade reference prices stood at INR 32,800-33,100/MT ex-Raipur and INR 33,200-33,500/MT ex-Durgapur, size 5.5 mm.

FINISHED FLAT

This week domestic HRC prices continued to fall further by around INR 300-500/MT in the traders market as the steel markets remain affected due to lock-down announced by Indian government from 23rd Mar'20. Only 20-25% of trades happening in domestic, shared by a trader in Mumbai region.

SteelMint's current assessment for HRC (IS 2062, 2.5 - 8 mm) for trade segment stands at INR 36,000-36,500/MT ex- Mumbai, INR 36,250-36,500/MT ex-Delhi & INR 37,500- 38,000/MT ex- Chennai. The CRC (0.9 mm IS513 GR) prices are assessed at INR 41,500-43,000/MT ex- Mumbai, INR 41,500-43,500/MT ex- Chennai & INR 40,250- 41500/MT ex-Delhi. The prices mentioned above are basic & extra GST @18% is applicable.

On the other hand, Indian steel manufacturers are yet to announce steel prices for June'20. However, mills are providing discounts on quoted prices to escalate buying in the domestic market.

Reference Prices as on 6th June 2020 (Week 23)

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

Indian Export Reference Prices as on 6th Jun'20

Prices in USD/MT
Source: SteelMint Research