Weekly: Indian steel market snapshot

Indian spot steel trades remained weak this week due to limited demand. However with curtailed productions through the standalone furnaces & hot rolling mills, the prices of billet inched up by INR 100-500/t, while rebars offer increased by INR 100-900/t in the central, east & northern India. Following a drop in furnaces output, sponge prices slightly drop by INR 100-300/t on low consumption.

In context to finished flat steel, domestic CRC prices have increased after the primary mills further raised CRC prices by around INR 1,000-1,250/t on tight supply and improved demand from the auto and white goods sector.

Iron Ore & Pellets

• SAIL conducted an auction for 104,000 t iron ore fines (Fe 61.3%) from its Barsua mines in Odisha on 17th Oct. The entire quantity received bids at INR 2,690-2,700/t (loaded into rakes and excluding royalty), as per sources.
  
  
• SteelMint domestic pellet index "PELLEX" down by INR 200/t w-o-w to INR 8,900/t DAP Raipur, amid limited trades reported this week.
  
  
• AM/NS India has resumed pellet imports in Sep'20 after a period of about 20 months. The miner had booked two vessels of pellets from Bahrain of 55,000t and 80,000 t, SteelMint learned from vessel-line up data.
  
  
• SteelMint's pellet export index (FoB east coast India) has increased further by $6/t w-o-w to $127/t. The decline in iron ore futures on bearish steel market sentiments in China has resulted a drop in prices.
  
  

Coal

• Most Indian end-users are currently holding back their imported coking coal purchases due to the higher prices.
  
  
• Latest offers for the Premium HCC grade are assessed at around $133/t FOB Australia, $142/t CNF China and $145.65/t CNF India.
  
  

Ferrous Scrap

Imported scrap prices to India have moved down by $5-10/t this week, following the global trend. Few imported scrap bookings in containers were concluded early this week by both western & southern India based steel mills. However, the sentiments softened towards the weekend.

• SteelMint's assessment for Shredded scrap in containers of UK origin is at $318/t CFR Nhava Sheva, down by $7/t w-o-w. Suppliers' offers stand at around $315-322/t CFR levels.
  
  
• The Ministry of Economy, UAE has issued a notice recently, stating that the temporary ban on steel scrap and waste paper exports has been extended for a period of another four months. Earlier this year UAE had issued a similar notice effective from 15 May'20, for a period of four months ending 15 Sep'20 in order to strengthen the country's domestic demand. Despite the UAE's scrap export ban, India has imported around 30,000 t during Jun'20. Thus market sources don't see a major impact of the ban extension.
  
  

Ferro Alloys

• Indian silico manganese prices have come under pressure due to dull demand and weaker export realization. Prices in Raipur dropped by INR 1,000/t to INR 60,500/t Ex-works, meanwhile, prices in Durgapur are firm at INR 61,500/t exw.
  
  
• Ferro manganese demand remained under pressure in the domestic market, however the exports market remained strong. Prices in the domestic market remained unchanged w-o-w at INR 62,000-62,500/t exw.
  
  
• Ferro chrome prices remained unchanged w-o-w at INR 73,000/t exw Odisha and is expected to rise further on chrome ore supply shortage.
  
  
• Ferro silicon prices are unchanged w-o-w at INR 82,000/t exw Bhutan, while dropped by INR 2,000/t in Guwahati to INR 82,000/t. Production remains limited and prices are holding firm.
  
  

Semi Finished

On weekly basis, Indian sponge iron prices dropped by INR 100-300/t, while billet offers surged by INR 100-500/t. The sponge iron makers reported fall in demand on account of curtailed production through the furnaces, hence this has supported billet prices despite limited demand.

• Vizag Steel has scheduled an e-auction for around 5,000 t pooled iron on 24 Sep'20.
  
  
• SAIL conducted an auction for 4,000 t prime steel grade pig iron on 18th Sep from its Bhilai Steel Plant, Chhattisgarh & the entire material was booked at INR 27,250-27,500/t exw.
  
  
• Induction grade billet export offers slightly rise this week & stood at around $408-410/t exw Durgapur, equivalent to $435/t CPT Nepal, via road delivery.
  
  
• Indian sponge iron (80 FeM, 100% lumps) export offers stable at $305-310/t CPT Benapole, equivalent to $325/t CFR Chittagong, Bangladesh. Demand remains weak due to poor demand in finished steel & competitive offers of imported scrap.
  
  
• Vizag Steel has floated an export tender for 20,000 t (65x65 and 90x90 mm) billets for the end-Oct'20 shipments. The due date of the tender is 23 Sep'20.
  
  
• SAIL conducted an auction for around 8,550 t (3 rakes) mixed off-grade pig iron on 16th Sep from its Bokaro Steel Plant, Jharkhand. The auction received limited participation as only one rake (2,850 t) was booked at INR 27,500/t exw.
  
  
• Gujarat-based Mono Steel India Ltd has concluded a billet export deal of 10,000 t at $475 CFR Africa for 100/130/150 cross-section billets, of 6-12 meters in length.
  
  
• Pig iron prices drop further by INR 200-700/t w-o-w, due to improved supply following curtailed furnaces prouction in major markets of central & eastern India.
  
  

Finished Longs

India's secondary finish long steel market in this week observed limited demand and slow trade activity in most of the major supplying locations, despite of these due to high cost of raw material the rebar manufacturers of north, east & central region have increased their offer by INR 100-900/t, while depending upon the inventories in mill and prices of other competitive markets, the offers fluctuated by INR 200-800/t in western and southern region.

• Mid scale mills wire rod export offers fell to around $446-448/t exw Durgapur, equivalent to $470-475/t CPT Nepal.
  
  
• Trade discounts in Raipur wire rod is currently around at INR 1,000/t and trade reference prices stood at INR 33,200-33,600/t exw Raipur, INR 33,200-33,500 Durgapur, size 5.5 mm.
  
  
• Trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 32,800-33,000/t exw Raipur, INR 33,700-34,000/t exw-Jalna.
  
  
• Trade discount given by Raipur based heavy structure manufacturers is at INR 700-1,000/t and the trade price of 200 Angle is at INR 36,600-36,900/t exw.
  
  

Finished Flats

Domestic CRC prices have continued uptrend this week after the major steel mills further raised CRC prices by around INR 1,000-1,250/t on tight supply and improved demand from the auto and white goods sector. Meanwhile at the beginning of Sep'20 steel producers have raised CRC prices by almost INR 3,000-3,500/t.

Meanwhile, maintenance shutdown in few mills and rebound in auto demand resulted in a hike in domestic CRC prices.

On the other hand, dull sentiments in the HRC market have softened prices. This has resulted in widening the gap between HRC and CRC prices in the Indian domestic market.

• SteelMint's benchmark price assessment of CRC (0.9 mm, IS 513 Gr) stands in the range of INR 49,750-50,000/t (exy Mumbai), up by INR 1,500 w-o-w. Meanwhile, HRC prices softened by INR 200-250/t w-o-w and stood in the range of INR 40,750-41,000 (exy Mumbai). Prices do not include GST extra @18%.
  
  
• Thus the gap has increased to around INR 8,500-9,000/t which is generally around INR 5,000-6000/t.
  
  

Reference Prices as on 19th Sep'20 (Week 38)
Prices are Exw & exclusive of GST

Indian export reference prices as on 19th Sep'20
Prices in USD/MT
Source: SteelMint Research