Weekly: Indian steel market snapshot

Indian spot steel trades in the secondary market remained supported during the week 44. As per SteelMint's assessment, the semi finished market sentiments have improved as domestic sponge iron & billet offers increased by INR 200-1,000/t. Indian primary mills are likely to hike finished steel prices by INR 1,000-1,500/t for Nov.

On the other hand, the finished long steel market of mid scale mills have noticed limited buying inquiries & trade activities in the market. However, strengthening semis prices have pushed rebar manufacturers to increase the offers by INR 200-1,500/t w-o-w in major markets.

In context to finished flat steel, domestic HRC prices in India have increased by INR 250/t w-o-w in the trade market as key Indian players announced a second hike in prices in October.

Iron Ore & Pellets

Iron ore prices in Odisha have continued to increase due to tight availability in the merchant market. Aditya Birla Group-owned - Essel Mining has increased iron ore fines price by INR 300/t this week. Another major miner - Rungta mines has also raised iron ore fines price by INR 250/t. Odisha's leading miner - Odisha Mining Corp (OMC) has scheduled its next iron ore e-auction on 3rd Nov'20 and increased the base price by INR 200/t against last auction's base price held in Sep'20.

• SteelMint's bi-weekly domestic pellet index "PELLEX" increased by around INR 150/t this week to INR 9,100/t, DAP Raipur. Few pellet makers from Raigarh and Jharsuguda have hiked offers by INR 200-300/t in the last three-four days. They are also planning to hike offers further. Market participants told SteelMint that amid scarcity of high-grade ore there are chances of lowering of pellet grade to Fe 62% compared to previous grade of Fe 64/63%.
  
  
• SteelMint's pellet export index (FoB east coast India) has remained largely stable on weekly basis and stood at $126.5/t on 28th Oct'20. Market participants still expect Chinese stricter pollution control norms to boost pellet demand in the coming term, however some traders highlighted the market to have remained less active. One pellet export deal was heard to have concluded for 55,000 t from eastern India. The deal was concluded at around $136/t CFR, China for Fe 63% and 3% Al pellet for mid Nov'20 shipment.
  
  

Coal

• Australian premium hard coking coal price rose marginally this week as buying interest turned positive following higher transacted prices for some December-laycan cargoes.
  
  
• However, Chinese demand remained subdued amid new restriction on coal imports from Australia, although China's steel production has been running at record levels.
  
  
• Meanwhile, steel mills in China turned to countries such as Canada to source premium hard coking coal, after Australian coal sales to China came under an informal ban.
  
  
• Nevertheless, the seaborne coking coal market is expected to strengthen in the ongoing quarter amid continued recovery in steel demand from global industrial and construction activities.
  
  
• Latest offers for the Premium HCC grade are assessed at around $109.00/t FOB Australia, $137.00/t CNF China and $120.80/t CNF India.
  
  

Ferrous Scrap

Imported scrap offers moved up further, following a global price trend. Tight scrap availability remained the major issue behind price uptrend because of the low scrap generation due to the pandemic. Major scrap supplier countries are now entering into another lockdown phase, as many countries facing problems due to second wave of COVID-19 pandemic. While steelmakers actively restocking ahead of winter holidays and expected a further price hike on the back of the recent hike in sponge prices.

• Gujarat based major steelmaker had booked bulk cargo earlier this week, sources have reported to SteelMint. The cargo comprises, around 14000 t of UAE and South Africa origin HMS 1, and the deal was concluded at $305-310/t CFR level.
  
  
• SteelMint's assessment for Shredded scrap in containers of UK origin stands at $323/t CFR Nhava Sheva, up $5/t w-o-w.
  
  

Ferro Alloys

• Indian silico manganese prices remained stable w-o-w amidst moderate demand in both the domestic and export market with limited transactions.
  
  
• Prices of ferro manganese remained stable despite dull demand in the domestic market. Export demand remains low to moderate and the prices remain stable.
  
  
• Indian ferro chrome prices went up by INR 1000/t despite limited demand. Increased chrome ore prices are refraining producers from lowering down the offers.
  
  
• Indian ferro silicon prices remained stable at INR 80,000/t despite the overall downtrend in the steel market. Few bulk deals were heard to be concluded at lower levels also.
  
  

Semi Finished

On a weekly basis, Indian semis market showed improvement, in which domestic sponge iron & billet offers surge by INR 200-1,000/t.

• SAIL is going to conduct an auction for 8,000 t prime steel grade pig iron from Bhilai Steel Plant, Chhattisgarh. The auction is scheduled on 03 Nov'20.
  
  
• Vizag Steel has scheduled an e-auction for 4,000 t pooled iron on 03 Nov'20.
  
  
• Tata Metaliks (TML) has resumed production operations at one of its blast furnaces from 25 Oct'20, which had gone for repair & maintenance on 19 Sep'20.
  
  
• Indian sponge iron export offers to Bangladesh rally by $10-15/t this week with fresh offers at $315/t CPT Benapole, equivalent to $325-330/t CFR Chittagong.
  
  
• Steel grade pig iron prices moved up by INR 300-600/t across major markets on account of supply shortage along with strengthening sponge iron & billet prices.
  
  
• Induction grade billet export offers slightly up by $3-5/t to $415-420/t exw Durgapur, equivalent to $435-440/t CPT Nepal.
  
  

Finished Longs

India's finish long steel market of mid-sized mills in this week have gone through with moderate response in terms of buying inquiries & trade activities in the market. As per our conversation with rebar manufacturers they didn't observe adequate demand in the market but high raw material cost have pushed them to increase the offer in rebar by INR 200-700/t w-o-w in most of the major markets, except in Bangalore where prices surged more than INR 1,500/t.

• Mid scale mills wire rod export offers increased by $15-20/t (w-o-w) to $470-475/t exw Durgapur, equivalent to $495-500/t CPT Nepal.
  
  
• Trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 33,700-34,000/t exw Raipur, INR 35,600-36,000/t exw-Jalna.
  
  
• Trade discount given by Raipur based heavy structure manufacturers is maintained at INR 900-1,200/t and the trade price of 200 Angle is at INR 38,100-38,400/t exw.
  
  
• Trade discounts in Raipur wire rod is currently at INR 500-700/t and trade reference prices stood at INR 34,400-34,600/t exw Raipur & INR 35,500-35,800 exw Durgapur, size 5.5 mm.
  
  

Finihed Flats

Domestic HRC prices in India have increased by INR 250/t w-o-w in the trade market as key Indian players announced 2nd hike in prices in October. SteelMint's benchmark assessment for commercial-grade HRC stands at INR 42,500-43,500/t exy Mumbai. Meanwhile in other trade markets, prices have increased up to INR 750-1000/t w-o-w basis.

• All the major steel manufacturers are planning for a further hike in Nov by around INR 1,000-1,500/t both in HRC and CRC. In addition to tight supply and robust downstream demand, hike in iron ore prices has also led to hike in steel prices.
  
  
• However, major stockists in northern India mentioned that although mills are pushing for increase but it's not viable.On similar lines, few trade sources in Mumbai shared that, "Restocking demand from stockist seems to have completed, but end use segment especially from construction sector has not yet picked up "
  
  

SteelMint price assessments of key trade markets

• HRC (IS 2062, 2.5-8 mm) prices are assessed at INR 44,500-45,000 (exy Delhi) while INR 43,500-44,500/t (exy Chennai).
  
  
• CRC (0.9 mm IS513 GR) are currently seen at INR 53,000-54,000/t (exy Delhi) and INR 53,500-54,500/t (exy Chennai).
  
  
• Prices do not include GST @18%.
  
  

Reference Prices as on 31st Oct'20 (Week 44)
Prices are exw & exclusive of GST

Indian export reference prices as on 31st Oct'20
Prices in $/t
Source: SteelMint Research