Weekly: Indian steel market snapshot

India's secondary steel market has marked a fall in prices during this week due to limited enquiries.

As per SteelMint's assessment, Indian semi finished market has observed a sharp fall of INR 1,500-2,500/t in sponge iron & INR 2,100-4,300/t in billet, nationwide. However, a major fall in billet prices was registered in southern India (Hyderabad) by INR 4,300/t.

Also, rebar prices witnessed a weak demand and limited buying inquiries during the week, resulting in a constant fall in prices by INR 2,000-3,500/t, w-o-w basis.

In line with this, HRC and CRC prices have dropped on the back of lower trade inquiries and softening demand among buyers. Prices have declined by around INR 1,000-1,500/t w-o-w in northern India and around INR 500-750/t in other markets.

Iron Ore and Pellets

• Odisha iron ore prices remained largely stable this week. Market participants are of the opinion that prices will soften owing to increasing supplies. Odisha Mining Corporation is to conduct an auction for 14,000 t iron ore and manganese ore on 2 Feb'21. The material offered comprises unsold ore produced by ex-leases in the auctioned mines in Odisha lying under Koira mining circle. The material offered is from Mahulsukha, Kanther-Koira, Kolmong, Teherai and Ganua mines.
  
  
• SAIL conducted an auction from its Barsua mines for iron ore tailing fines. The total material put up for auction was 100,000 having grade Fe 59.8%. Entire material offered was booked at INR 1,600-1,610/t (ex-mines and excluding royalty).
  
  
• JSW Steel turned another iron ore mine of Karnataka operational in Q3 FY '21, according to the company's recent quarterly results released. With this, all the captive mines (9 in Karnataka and 4 in Odisha) have become operational.
  
  
• NMDC is going to conduct two iron ore auctions for around 651,000 t from its Bacheli mines and 50,400 t on 28 Jan'21 from its Kirandul mines, Chhattisgarh.
  
  
• SteelMint's bi-weekly domestic pellet index " PELLEX " inched down by INR 50/t to INR 12,200/t DAP Raipur. Raipur based pellet makers are holding their offers stable at around INR 12,450-12,750/t (DAP, Raipur).
  
  
• SteelMint's weekly pellet export index (FOB east coast India) has risen to $196/t, up by $4/t w-o-w. Indian pelllet export prices are trading at all-time high, as per the data maintained with SteelMint since CY'12.
  
  

Coal

• The FoB price for Australian premium low-volatile hard coking coal rallied amid spot bookings concluded at higher levels during the course of the week.
  
  
• Higher-priced bids for late February and March laycan continue to appear in the spot market, indicating strong demand from buyers.
  
  
• The Indian market is presently observing resurgence in restocking demand for coking coal along with a strong metallurgical coke market.
  
  
• Nevertheless, India-delivered premium hard coking coal price for Australian-originated material is anticipated to remain relatively weaker because Indian buying interest for seaborne coking coal is still limited despite ample material availability at competitive price levels.
  
  
• Latest offers for the Premium HCC grade are assessed at around $135.50/t FOB Australia, $218.00/t CNF China and $150.50/t CNF India.
  
  

Ferrous Scrap

• The current volatile market situation kept imported scrap trades slow to India for yet another week. Market participants are now in wait & watch mood. Traders having material in the high seas were trying to push out sales at slightly lower prices. Other market participants are of the view that after the budget, prices may find some clarity.
  
  
• SteelMint's assessment for containerised shredded stands at $437/t CFR Nhava Sheva level, down by $50-60/t w-o-w.
  
  
• Very limited firm offers for shredded were heard as the market is standstill. Only arrival cargo is being sold, fresh booking is stopped, SteelMint learnt.
  
  

Ferro Alloys

• Indian silico manganese prices went down owing to dull demand in the domestic market, while in exports, prices for 65-16 grade increased marginally amidst shortage of the grade in the portside regions.
  
  
• Ferro manganese prices went down in Raipur but remained stable in Durgapur, due to moderate demand in the domestic market. Many Durgapur based producers shifted to ferrochrome amidst better profitability.
  
  
• Ferro chrome prices escalated by INR 11,500/t in the week, due to increasing Chinese demand and prices in their domestic market. The producers are firm on their offers now and are expecting the prices to reach INR 1,00,000/t soon owing to strong domestic market. Meanwhile, few producers in Durgapur belt have traded at INR 98,000/t exw.
  
  
• Indian ferro silicon prices came down due to dull demand in the domestic market. However, increasing international prices and no imports might keep the prices stable in the domestic market.
  
  

Semi Finished

On a weekly basis, domestic sponge iron offers fall sharply by INR 1,500-2,500/t & billet by INR 2,100-4,300/t across regions. In this period major fall in billet prices reported in South India (Hyderabad) by INR 4,300/t.

• Induction grade billet export offers to Nepal drop by $30/t this week to $495/t exw Durgapur (equivalent to $520/t CPT Nepal).
  
  
• Indian sponge iron export prices fell by $20-25/t to $360/t CPT Benapole (equivalent to $375/t CFR Chittagong, Bangladesh). However, demand remains poor & no major fresh deals this week, as per participants.
  
  
• Steel grade pig iron prices declined by INR 1,000-2,000/t due to significant drop in steel & scrap prices globally. Participants assuming, prices to remain soft as supply is strong, while demand is poor with major suppliers.
  
  
• Tata Metaliks Ltd has cut foundary pig iron prices by INR 1,900/t (5%) to INR 38,000/t exw Kharagpur.
  
  
• SAIL conducted a pig iron auction from its Rourkela Steel Plant for 5,400 t material on 22 Jan '21 & buyers booked only one lot (100 t) at INR 33,300/t exw.
  
  
• Vizag Steel has floated two export tenders around 20,000 t (90x90 mm) and 10,000 t (65x65 mm) billets and the due date of the tender is 27 Jan '21.
  
  
• SAIL has floated an export tender for 15,500 t (220 x 1,510 mm) non alloys concast slab. The due date of the tender is 25 Jan '21.
  
  

Finished Long

India's finish long steel market via induction route remained witnessed a weak demand and limited buying inquiries in this week as well and in most of the major supplying regions, rebar prices sharply declined around INR 2,000-3,500/t w-o-w basis. Along with lack of demand, reducing raw material cost are also a major factor behind lowered long steel prices.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 40,000-40,400/t exw Raipur, INR 44,600-45,000/t exw Jalna.
  
  
• Trade reference price in heavy structural steel of 200 mm Angle stood at INR 42,700-43,100/t exw Raipur.
  
  
• Trade discounts in Raipur wire rod are currently at INR 1,000-1,200/t and trade reference prices stood at INR 38,800-39,000/t exw Raipur, INR 40,000/t exw Durgapur, size 5.5 mm.
  
  

Finished Flat

This week regional prices of HRC and CRC reported a decline on the back of lower trade inquiries and softening demand among buyers. Consumers have stalled their purchases and are anticipating a further decline in domestic prices, shared by major distributors in the Faridabad region. Prices have declined by around INR 1,000-1,500/t w-o-w in northern India and around INR 500-750/t in other markets

• HRC (IS2062 2.5-8mm) stood at INR 56,500-57,500/t exy Mumbai, INR 56,000- 57,000/t exy Delhi, and INR 57,000-59,000/t exy Chennai.
  
  
• CRC (0.9 mm GR) is around INR 68,000-68,500/t exy Mumbai, INR 66,000- 69,000/t exy Delhi, and INR 67,000-71,000/t exy Chennai.
  
  
• The second hike announced by major steel mills didn't get absorbed in the trader's market.
  
  
• Premium on trade prices reduced on limited buying inquiries. In the last week of Dec'20, this gap between trade and mill prices used to be around INR 4,000-5,000/t on robust buying in the traders market.
  
  
• Softening global prices. Chinese steel manufacturers have cut their export offers significantly by $70/t w-o-w to $640-650/t FoB China. Traders are expecting a significant drop in domestic HRC prices on falling global offers.
  
  

On contrary to this, major steel mills are planning to increase domestic flat steel prices by around INR 1000-1500/t in the first week of Feb'21

Reference Prices as on 23 Jan'21 (Week 4)
Prices are exw & exclusive of GST

Indian export reference prices as on 23 Jan'21
Prices in $/t
Source: SteelMint Research