Weekly: Indian steel market snapshot

Spot steel trades in India's secondary market remained optimistic and showed positive trend during the week 51.

Domestic billet prices have increased by INR 800-3,000/t ($11-41), while sponge iron prices escalated by INR 400-1,200/t, w-o-w, according to SteelMint's assessment. Also, the rebar market has registered a sharp hike in prices of around INR 2,000-4,000/t w-o-w, basis in most of the major supplying locations.

In context to finished flat steel, the primary mills have announced a third price hike of around INR 1,000-1,500/t ($14-20) for December.

Trade sources are assuming prices are likely to remain strong on account of good orders in hand, rising raw material & strengthening prices of primary steel mills, which is creating positive signs in the steel industry.

Iron Ore and Pellet

• Odisha based merchant iron ore miners Essel Mining has increased iron ore lumps and fines prices by INR 300/t and INR 500/t respectively.
  
  
• SAIL received active participation in its first iron ore fines auction conducted for 104,000 t iron ore fines (Fe 62%) was at INR 4,800-4,850/t (loaded into rakes and excluding royalty, DMF & taxes) from Kiriburu mines in Jharkhand. This was its first auction from Jharkhand mines after the most awaited clearances from state govt.
  
  
• NMDC announced the 2nd price hike for Dec'20 at the beginning of this week, SteelMint learned from credible sources. The price of Baila lump has increased by INR 700/t ($10), DR-CLO by INR 820/t ($11) and that of fines by INR 500/t ($7).
  
  
• SteelMint's bi-weekly domestic pellet index "PELLEX" has increased further by INR 100/t to INR 12,050/t DAP Raipur.
  
  
• SteelMint's pellet export index (FOB east coast India) increased further to $170/t, up by $12/t w-o-w. Falling pellet inventories at Chinese ports, limited offers from India and increased inquiries before Chinese New Year holiday led to the price hike. In the last two weeks prices have increased around $29/t.
  
  
• KIOCL (Pellet maker, Southern India) has concluded a pellet export deal for 55,000 t for Fe 64% grade pellets with less than 2% Al pellets was reported to be concluded at $182-184/t, FoB India this week.
  
  

Coal

• Australian premium low-volatile hard coking coal FoB price inched slightly lower this week, whereas its CNF China price kept surging on stronger buying interest and tight supply of non-Australian coking coals.
  
  
• The seaborne spot market saw transactions concluded at higher price levels to Chinese end-users on restocking needs as well as limited availability of domestic materials in China.
  
  
• The FOB premium hard coking coal prices are still relatively weak because China is not importing coal from Australia.
  
  
• Most Australian coal miners predict that China will not resume imports of Australian coal in the first quarter of next year and are concerned that the ongoing ban will continue indefinitely.
  
  
• Trading activities in the ex-China FoB market have slowed down toward the end of the year following the conclusion of a series of transactions in the past couple of weeks.
  
  
• Latest offers for the Premium HCC grade are assessed at around $100.00/t FOB Australia, $192.50/t CNF China and $113.50/t CNF India.
  
  

Ferrous Scrap

• India's imported scrap offers followed global trends registering a total hike of $50 so far in Dec '20, though limited deals have been reported at these levels, as buyers have turned cautious on sharp price rally. SteelMint's assessment for Shredded scrap in containers of UK/EU origin currently stands at $438/t CFR Nhava Sheva.
  
  
• A prominent Indian steelmaker has booked around 2,000 t of MS shredded scrap in containers at $440/t CFR Mundra and around 2,500 t of a busheling bundle at $475/t CFR Vizag basis.
  
  
• Material availability remains the major factor behind the measurable price hike in the last couple of weeks. The upcoming winter holidays may slow down the imported scrap market, as major supplying countries like the UK, and USA may close their yards for the next two weeks and may restart in the second week of Jan '21
  
  

Ferro Alloys

• Silico manganese prices skyrocketed in India amidst better demand from the steel market. It is expected that the prices might reach to INR 70,000/t next week. Meanwhile, current deals are in the range of INR 66,500-67,000/t exw.
  
  
• Ferro manganese prices increased amidst the increased steel prices in India. Meanwhile, the supply shrinkage for ferro manganese is favouring the increase in prices in the domestic market.
  
  
• Prices of ferro chrome remained stable in India amidst low demand and lack of support from the exports market. However, inquiries have started rising and prices are expected to increase in line with better demand.
  
  
• Prices of ferro silicon have increased significantly by INR 10,000/t w-o-w in both Bhutan and Guwahati and it is expected to rise further. The price hike is due to the increase in international prices and no imports taking place.
  
  

Semi Finished

On a weekly basis, domestic billet offers incline by INR 800-3,000/t due to increased buying activities, similarly sponge prices rise by INR 400-1,200/t in major markets. In this period major rise in billet prices reported in Jalna (Maharashtra) by INR 3,000/t.

• Induction grade billet export offers surged by $20-25/t to $515-520/t exw Durgapur, equivalent to $540-545/t CPT Nepal. However demand was little bit low, as per sources.
  
  
• Indian sponge iron export prices increased by $15-20/t (w-o-w) to $390-393/t CPT Benapole, equivalent to $405-408/t CFR Chittagong, Bangladesh. As per suppliers, no major deals on revised offers.
  
  
• Steel grade pig iron prices rose by INR 1,000-2,000/t this week, with a sharp surge of INR 2,000/t in the northern region, followed by INR 1,100-1,600/t in eastern part & about INR 1,000/t in central India. Supply shortage & rising prices of substitute products as well raw materials, have resulted in a sharp surge in pig iron offers.
  
  
• SAIL's pig iron auction on 18 Dec'20 from its Bhilai Steel Plant for 8,650 t was concluded at a weighted average price of INR 33,000/t exw. Another auction on the same day from Rourkela Steel Plant for 6,000 t was concluded at a weighted average price of 32,600/t exw.
  
  
• Vedanta Limited has increased its offer for foundry grade pig iron by INR 3,300/t to INR 40,500/t DAP Gujarat.
  
  
• Tata Metaliks Ltd (TML) has raised foundry grade pig iron offer by INR 4,100/t to INR 37,800/t ($514) & for low silicon (1-1.5%) grade by INR 3,300/t to INR 35,000/t ($476), exw Kharagpur, eastern India (w.e.f. 14 Dec).
  
  

Finished Long

India's finish long steel market of mid-sized mills continues on a rising trend in this week as well and the rebar prices move up 2,000-4,000/t w-o-w basis in most of the major markets.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 42,400-42,700/t exw Raipur, INR 46,200- 46,500/t exw Jalna.
  
  
• Trade discount given by Raipur based heavy structure manufacturers stood at INR 600-900/t and the trade price of 200 Angle is at INR 44,500-44,900/t exw.
  
  
• Trade discounts in Raipur wire rod are currently at INR 300-500/t and trade reference prices stood at INR 43,500-43,800/t exw Raipur, INR 43,000-43,500 exw Durgapur, size 5.5 mm.
  
  

Finished Flat

• Indian steel mills have recently announced a third round of price hike by INR 1,000-1,500/t ($14-20) for Dec'20. Robust demand, strong global prices, tighter material availability, and cost-push have resulted in the continuous upside in domestic flat steel prices.
  
  
• Effective prices of major Indian steel mills for HRC are around INR 50,150-50,400/t and CRC are around INR 59,250-59,650/t exy Mumbai.
  
  
• Prices in the trade segment - As per SteelMint benchmark domestic HRC (IS2062 2.5-8 mm) stood at INR 51,000-53,000/t and CRC (0.9 mm GR) is around INR 59,000-62,000/t exy Mumbai.
  
  
• HRC export offers from major countries have increased by $20-40/t w-o-w. Recent HRC export deals concluded by Indian mills for the Middle East and Europe at around $725-730/t and $750-775/t CFR respectively.
  
  

Reference Prices as on 19 Dec'20 (Week 51)
Prices are exw & exclusive of GST

Indian export reference prices as on 19 Dec'20
Prices in $/t
Source: SteelMint Research