Weekly: Indian steel market snapshot

Indian spot steel trades improved during the second half of week-26 after sponge iron prices hit over three years low levels.

As per SteelMint's assessment, this week prices of sponge iron & billet increased by INR 400-1,000/t with major hike in central & eastern regions. The producers in these regions reported limited stock of respected commodities, this leads to significant hike in price range.

In context to finished steel rebar prices through the mid scale mills fluctuated by INR 200-300/t due to average lifting amidst sufficient stock among mid scale mills. Whereas flat steel prices fell further by INR 250-500/t owing to falling sales on sluggish demand.

IRON ORE & PELLETS

Odisha iron ore fines index (Fe 63%) inched down to INR 1,800-1,900/t (Ex-mine, included royalty DMF NMET) this week but lumps prices remain unchanged.

NMDC (C.G), India's largest iron ore mining company, has resumed its dispatches from the Bacheli iron ore mining complex. In Karnataka 72% material booked in recent iron ore e-auction of private miners. Due to the increasing number of COVID-19 cases in Karnataka, transportation is getting hampered, resulting in less participation in a recent auction.

-- SteelMint's bi-weekly domestic pellet index "PELLEX" was unchanged on Friday at INR 5,900/t DAP Raipur. One transaction of 15,000t was reported at INR 5,800/t (Ex-works) in the publication window.

-- Major Bellary based pellet maker sold around 15,000t high-grade pellets (Fe 65%) at around INR 6,800/t (EXW) in Hyderabad. In another regular grade Fe 63% deal, pellet makers have sold around 37,000t pellets at INR 5,700-5,850/t (EXW) during the week.

-- Western India pellet maker - Jindal SAW has cut pellet offer by INR 200/t to INR 8,000/t (delivered Kandla).

-- SteelMint's pellet index (FoB east cost India) inched down to $100/t as on Tuesday (23rd Jun'20). The previous assessment was done on 19 June at $100.1/t. Limited buying interest from China was seen on increased port inventories.

-- An Odisha based pellet maker concluded around 25,000t export deal for Fe 64% grade with 3% Al to Malaysia at around $115/t CFR with an FoB equivalent of $102/t.

COKING COAL

Australian premium low-volatile (PLV) hard coking coal (HCC) prices have held mostly steady this week, notwithstanding the absence of Chinese buyers due to a public holiday.

In India, crude steel production has gradually resumed over the past month in line with the graded opening up of lockdown restrictions. However, with most steelmakers still consuming their existing long-term contract cargoes, inquiries for seaborne coking coal from India are unlikely to revive before September this year.

-- Latest offers for the Premium HCC grade are assessed at around $116.00/t FOB Australia, $127.00/t CNF China and $127.70/t CNF India.

SCRAP

Imported scrap offers to India moved down on a weekly basis, following the global price falling trend, with only a few small quantity deals getting concluded recently. Buyers expect prices to move down further, while slow finished steel sales too, has kept steelmakers away from active bookings .

"SteelMint's assessment for shredded scrap from Europe stands at $278/t CFR Nhava Sheva, down by $3-4/t from last week. Few buyers had earlier concluded some deals at $278/t CFR level, while few offers at $276-277/t CFR level were also witnessed by week closing."

"HMS 1&2 (80:20) 8% of ci gi sold at $240/t level for around 500-600 t from Dubai, HMS 1&2 from UK is being offered at $245-250/t CFR basis, while buyers are bidding at a very low level at around $ 230-235/t CFR Nhava Sheva. HMS 1&2 (80:20) from West Africa remained stable at around $ 245/t CFR Goa against last week, buyers bid at $ 240/t CFR."

SEMI FINISHED

Indian Semi finished steel market observed better demand as billet offers up by INR 400-900/t with major hike in Raipur, Mandi gobindgarh & Jalna by INR 800-900/t, while hike in remaining markets assessed by INR 400-800/t, w-o-w. Inline sponge iron prices surge sharply in Raipur by INR 1,000/t followed by INR 800/t in Durgapur & INR 400/t in Bellary.

Also steel grade pig iron prices increased by INR 300-500/t in Durgapur & Ludhiana due to supply shortage, while prices dropped in the same proportion in Raipur & Raigarh.

-- Indian sponge C-DRI (80 FeM, 100% lumps) export offers increased by $5/t to $240/t CPT Benapole, equivalent to $260-265/t CFR Chittagong, Bangladesh.

-- The mid scale mills billet export offers increased by $10/t to $388-390/t & by $5/t to $443-445/t for wire rod, CPT Nepal, via road delivery.

-- Indian billet export prices have inched down marginally in recent deals. Since last week, Indian mills are reported to book over 80,000 t billets. According to trade sources, the majority of deals are heard to have been booked for China.

-- Recent deals for Indian 150*150mm billets are reported at $375-380/t FoB India against last week's deals of $380-385/t FoB India.

-- SAIL has floated an export tender for 30,000t mild steel non alloys concast slab (Q235B/SS400) from its Rourkela steel plant. The due date for bids is 30 Jun'20.

-- SAIL is to conduct an auction for around 4,000t steel grade pig iron on 29 Jun'20 from its Rourkela steel plant.

-- TATA Metaliks Ltd, pig iron sales fell by 8% q-o-q to 79,487 t in Q4FY'20 against 86,189 t in Q3FY20. However on a y-o-y basis the same surged by 14% y-o-y in Q4 FY'20 compared to 69,574 t in Q4 FY'19.

-- In the mid of this week a couple of Indian private mills have concluded 50,000 t of pig iron export deals at around $340/t, CFR China.

FINISH LONG STEEL

India's finish long steel market reported limited transactions during the week through the medium and small scale mills and particularly rebar price range remained volatile by INR 200-400/t in most of the regions except Goa where prices shoot up by INR 1,100/t on weekly price comparison. However, few improved buying inquiries learned during the mid of week from major supplying regions that are Central or Western regions.

Sources believe that rebar prices might observe a range bound due to falling margins (conversion spread) between billets to rebars, which is currently in the central region hovering at INR 3,000-4,000/t against INR 5,000-6,000/t in the beginning of June.

-- Trade reference rebar prices (12-25mm) through the mid-sized mills assessed at INR 30,900-31,200/t Ex-Raipur & INR 32,600-32,900/t Ex-Jalna.

-- Trade discount by Raipur based heavy structure manufacturers are almost similar to previous week and maintained at INR 500-700/t and trade price of 200 Angle is at INR 34,000-34,300/t EXW.

-- Trade discounts in Raipur wire rod are currently at INR 800-900/t and trade reference prices stood at INR 30,600-31,000/t ex-Raipur and INR 31,500-31,700/t ex-Durgapur, size 5.5mm.

FINISH FLAT

This week domestic HRC trade prices fell further by around INR 250-500/t owing to lower sales, liquidity issues and sluggish demand hovering in the domestic market.

-- SteelMint's assessment for HRC (IS 2062, 2.5 - 8mm) for trade segment stands at INR 35,500-36,000/t ex- Mumbai, INR 35,500-35,800/t ex-Delhi & INR 37,000-38,000/t (ex-Chennai.

--Meanwhile, CRC (0.9 mm IS513 GR) prices are assessed at INR 40,000-42,000/t (ex- Mumbai), INR 41,000-42,000/t (ex- Chennai) and INR 40,000- 41,000/t (ex-Delhi).The prices mentioned above are basic and excluding of 18% GST.

Major steel mills may announce price revision next week for July deliveries, however trade sources are expecting rebates or discounts to escalate buying.

Reference Prices as on 27th June 2020 (Week 26)

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

Indian Export Reference Prices as on 27th Jun'20

Prices in $/t

Source: SteelMint Research