Weekly: Indian steel market snapshot

Indian secondary steel market has observed active demand & a price rally during the week in finished long products.

As per SteelMint's price assessment, domestic sponge iron and billet offers increased by INR 200-1,800/t across India with a major increase seen in Western India. Also, the rebar market has witnessed an upward trend this week and the prices have moved up by INR 400-1,300/t w-o-w basis in most of the major supplying locations.

In context to finished flats, domestic HRC prices have seen a slight improvement by INR 250/t as compared to last week. However, mills have actively booked quantities for export on bullish global market sentiments.

Iron Ore and Pellet

• SAIL conducted an auction from its Rajhara mines (Chhattisgarh) on 26 Feb '21, for 84,000 iron ore fines (Fe 58.1-60.37%). Out of the total quantity offered only 28,000 t (Fe 60.37%) received bids at INR 3,350/t (loaded into rakes and including royalty).
  
  
• NMDC conducted iron ore e-auctions on 25th Feb '21 for 701,400 t iron ore from its Chhattisgarh mines. Offered quantity comprised of 600,600 t of fines, 50,400 t DR CLO and rest comprised of lump and ROM. The DR-CLO lots received a good response and bids increased by around INR 820/t over the set base price, as it is still cost-effective than other substitutes. However, ROM lots fetched flat bids and that of lump moved up slightly by INR 80/t.
  
  
• KIOCL has floated a tender for iron ore fines purchase from indigenous sources. The tender due date is 6th Mar'21 with a quantity in multiples of 25,000 t. KIOCL had floated two tenders for pellet sales in the domestic and export market with due date for both the tenders being 25th Feb'21. Offered quantity for each tender is about 50,000 t pellet (Fe 63%). The tender has been postponed till early next week.
  
  
• ArcelorMittal Nippon Steel India is planning to increase their pellet production capacity to 20 mn t pa by the end of Mar'21.
  
  
• SteelMint's bi-weekly domestic pellet index "PELLEX" has increased by INR 100/t to INR 11,700/t, DAP Raipur in recent trades.
  
  
• SteelMint's weekly low-grade Indian iron ore fines (Fe 57%) export index is currently assessed at $98/t FoB east coast India, up by $6 w-o-w. SteelMint's weekly pellet export index (FOB east coast India) for Fe 64% grade has decreased by $4/t w-o-w to $180/t.
  
  

Coal

Australian premium low-volatile (PLV) hard coking coal (HCC) price fell sharply this week following ArcelorMittal's sell tender concluded at $126/t FOB Australia for 75,000 t of March-loading Goonyella. At present there is relatively better demand for April laycan cargoes, although demand for March-loading cargoes has thinned out in consideration of the recent unclear price movement.

Short-term market outlook remains bearish on limited buying interest, as buyers became cautious and retreated to the sidelines amid volatility in the ex-Chinese markets. Australian coking coal prices are largely anticipated to remain at lower levels until the Chinese import ban on Australian coals is lifted.

• Latest offers for the Premium HCC grade are assessed at around $125.75/t FOB Australia, $222.50/t CNF China and $145.85/t CNF India.
  
  

Ferrous Scrap

Imported scrap prices in India too surged significantly on the back of hike in global scrap prices. However, Indian mills remained slow, since past one month, in booking fresh slots for March shipments. Most of the buyers are purchasing local scrap as it's cheaper than imported scrap.

Indian scrap prices are still behind as compared to a global market. Market insiders believe that prices are likely to go up further by $10-20 and buyers may come back next week. Few deals for 500-700 t of shredded have been booked at a $465-475/t CFR basis, activities have slightly picked up this week.

• SteelMint's assessment for containerised shredded of UK/US origin stands at $470/t CFR Nhava Sheva level, increasing sharply by $25-30/t w-o-w.
  
  
• HMS 1&2 (80:20) from UK/EU is being quoted around $420-425/t CFR level, whereas same from UAE origin now stands at $410-412/t levels.
  
  
• HMS 1 from UAE is being offered at $420-425/t CFR level
  
  

Ferro Alloys

• Silico Manganese prices increased due to high demand and lower inventory of silico manganese with steel producers. There is supply shrinkage in the domestic market as most producers are either catering to government orders or exports in line with better international prices.
  
  
• Ferro Manganese prices increased amidst bullish export market sentiments. Meanwhile, there is only a handful of ferro manganese producers active in the domestic market. Current offers are at around INR 70,000-71,000/t (HC 70%) on exw basis.
  
  
• Indian ferro chrome prices increased by INR 1,500/t to INR 99,000/t as most sellers are holding back offers before the Chinese ferro chrome purchase tender prices are released.
  
  
• Prices are stable for ferro silicon at INR 98,000/t and producers are optimistic as prices remain firm on increased export inquiries.
  
  

Semi Finished

On a weekly basis, domestic sponge iron offers rise by INR 200-1,300/t in major locations. Similarly, billet prices inclined by INR 500-1,800/t across India with a major increase seen in Western India.

• SAIL conducted pig iron auction for 1,100 basic grade on 25 Feb '21 from Durgapur Steel Plant & the entire quantity booked at INR 34,300 /t exw.
  
  
• SAIL conducted an auction on 25 Feb '21 for 4,800 t (steel grade) pig iron from its Rourkela Steel Plant, Odisha. Buyers booked the entire quantity at a weighted average price of INR 34,900/t exw.
  
  
• Vizag Steel has floated four ocean export tenders for billets (20,000 t/95*95mm, 10,000 t/65*65mm), blooms (60,000 t/150*150mm, 3SP/4SP). The due date for bloom tender is 02 Mar '21, while for billet tender is 03 Mar '21.
  
  
• Vedanta Limited has increased its foundry grade pig iron offer by INR 1,500/t to INR 40,000/t FoR Ahmedabad, effective from 21 Feb'21.
  
  
• TATA Metaliks Ltd has raised its basic grade (Si 1-1.5%) pig iron price by INR 3,000/t to INR 36,700/t ($507) exw Kharagpur, eastern India and concluded a tender for a rake of foundry grade pig iron at around INR 41,600/t FoR Punjab on 22nd Feb '21.
  
  
• Induction grade billet export offers stood at around $515/t exw Durgapur (equivalent to $540/t CPT Nepal). However few parcels have been sold at approx $510-512/t exw, equivalent to $530-535/t CPT Nepal.
  
  
• Indian sponge iron export offers increased up to $10/t to $385-390/t CPT Benapole (equivalent to $405-410/t CFR Chittagong, Bangladesh), however, no major deals due to a significant price rally, as per exporters.
  
  
• Steel grade pig iron prices increased by INR 500-1,500/t, w-o-w, on active demand amidst strengthening billet & scrap prices globally. The major hike of around INR 1,500/t was recorded in Central India, following a sharp hike in bid price in SAIL pig iron auction.
  
  

Finished Long

India's finish long steel market via induction route has witnessed an upward price trend in this week, and the rebar prices moved up by INR 400-1,300/t w-o-w basis in all over the major supplying locations.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 42,300-42,600/t exw Raipur, INR 46,300-46,700/t exw Jalna.
  
  
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 600-1,000/t and trade reference price of 200 mm angle is stood at INR 44,900-45,300/t exw Raipur.
  
  
• Trade discounts in Raipur wire rod are currently at INR 600-800/t and trade reference prices stood at INR 42,200-42,500/t exw Raipur, INR 42,200-42,500/t exw Durgapur, size 5.5 mm.
  
  

Finished Flat

India's domestic HRC prices remained range-bound this week. SteelMint's benchmark prices for 2.5 mm thickness HRC stands at INR 53,500-54,500/t exy Mumbai, up by INR 250/t as compared to last week. Prices are expected to bearish in the near term as:

• Increase in iron ore supplies- Serajuddin mines have resumed iron ore offers on 16th Feb after a gap of over two months. Two of Odisha's auctioned mines - Guali and Jilling have commenced production with a combined capacity of about 12 mn t pa. India's largest iron ore miner - NMDC has restarted operations at its Donimalai iron ore mine, the company said in its recent BSE filing. This, in turn, may lower steel prices in the near term.
  
  
• Stockists holding sufficient inventories-Earlier when prices were peaking at an abnormally high rate, big distributors procured huge quantities of HRC as the market was very volatile. However, the move has led them to a point wherein they have sufficient inventories with them and the panic to procure stocks does not exist.
  
  

On the other hand, mills have increased their export allocations and are not facing any pressure to sell material at local markets.Currently, mills have raised HRC export offers by $15-25/t and offering around $740-750/t CFR Vietnam,$750/CFR to UAE, and around $825/t CFR to Europe for late March early April shipments.

Reference Prices as on 27th Feb'21 (Week 9)
Prices are exw & exclusive of GST

Indian export reference prices as on 27th Feb'21
Prices in $/t
Source: SteelMint Research