Weekly : Indian Steel Market Snapshot

Indian spot steel trades in secondary market remained limited during the week-8 (15-22nd Feb'20). Participants mentioned that, inquiries remained limited and thus on rising stock, prices slightly fell in major markets.

As per assessment, during the week prices of Semis & Finished long steel products fell near to INR 100-500/MT (upto USD 7) through the mid sized mills. Inline, the flat steel prices plunged by INR 500-750/MT on account of limited demand in domestic market.

IRON ORE and PELLETS

Odisha Mining Corporation (OMC) had scheduled its iron ore fines e-auction on 20th Feb'20. Out of 389,000 MT iron ore fines put on auction, 301,000 MT (77%) got booked. Total 14 companies have participated in the submission of technical bids of Guali iron ore mining auction having EC of 5.7 MnT pa.

-- SAIL has concluded two iron ore fines auction from Bolani and Barsua (Odisha) mines for 100,000 MT (Fe 62.5%) and 60,000 MT (Fe 62%) respectively. Next auction of 28,000 MT Iron ore fines (Fe 62.59%) from Dalli mines (C.G) schedule on 25th Feb 2020 next week.

-- PELLEX inch up by INR 100/MT to INR 6,700/wmt (DAP Raipur). One of the Pellet makers from Raipur concluded 5,000 MT deal to Bilaspur at INR 6,600/MT ex-plant. Raipur based pellet makers kept the offers stable at INR 6,700/MT ex-plant this week.

-- Western India based pellet maker - Jindal SAW has hiked pellet offers by INR 400/MT to INR 8,500/MT (delivered Kandla).

-- Eastern India based pellet makers have concluded total three pellet export deal for Fe 64% grade pellets with 2.5-3% Al at USD118-120/MT, CFR China.

-- SteelMint assessment for standard grade pellets (Fe 64%, 3% Al) stands for this week at USD 118-119/MT, CFR China against last week.

COAL

Asian seaborne premium low-volatile (PLV) hard coking coal (HCC) prices moved higher this week with the conclusion of a sell tender in China.

The sell tender was concluded for 80,000 MT of an Australian Premium Mid Vol (PMV) Goonyella at USD 156.22/MT FOB Australia with April 5-19 laycan. At this juncture, near term spot market price expectations remain firm amid domestic supply tightness following the coronavirus outbreak.Chinese end-users expect gradual resumption of domestic coal production and logistics activities, while the government has also implemented measures to aid the recovery for the Chinese market.

-- Latest offers for the Premium HCC grade are assessed at around USD 159.50/MT FOB Australia, USD 170.00/MT CNF China and USD 171.20/MT CNF India.

FERROUS SCRAP

Ferrous Scrap - Even as imported scrap offers to India from most global origins continued to move up, trades to India witnessed considerable improvement this week, with decent bookings being witnessed after slow activity in the previous couple of weeks.

-- SteelMint's assessment for Shredded 211 to India from USA and UK/Europe now stands at USD 305-310/MT CFR Nhava Sheva up USD 10-15/MT against last week. Bookings for Shredded scrap were reported at USD 305-306/MT earlier in the week, while offers now USD 306-307/MT by USA and USD 308-310/MT from UK & European origins.

-- Brazil origin HMS 1&2 (80:20) is being offered at around USD 285/MT CFR Nhava Sheva. Australian origins are offering HMS 1&2 (80:20) at USD 286-290/MT CFR while HMS 1 from South Africa (hand loaded material at USD 300/MT.

-- HMS 1 (no ci gi) being offered at USD 300-305/MT CFR, while HMS 1&2 (ci gi 4-5%) at USD USD 295-300/MT CFR. HMS 1&2 (80:20) from UK and Europe stand at USD 280-284/MT CFR. West African HMS offers to Goa stood at USD 275/MT CFR.

FERRO ALLOYS

-- Silico Manganese prices fell amid an oversupplied market in both Raipur and Durgapur regions.

-- Ferro Manganese Prices remained stable amid moderate demand. Although, the fall in prices is unlikely as the number of producers for Ferro Manganese is scarce and increased Manganese ore prices.

-- Prices of Ferro Chrome fell amid dull export market. Producers are waiting for the Chinese participants to return from their extended holidays due to deadly Coronavirus outbreak.

-- Indian Ferro Silicon prices remained stable amid short supply. Producers believe that the prices may remain stable for the coming weeks.

SEMI FINISHED

Indian domestic Billet offers plunged by INR 100-500/MT (upto USD 7) across the country on account of mis-match trade cycle on slowdown demand. Inline, Sponge iron prices fell slightly by INR 100-400/MT all regions following drop in Billet prices.

Also pig iron demand has weaken on account of falling steel prices and as per assessment offers moved down by INR 100-400/MT W-o-W.

-- Indian sponge iron (80 FeM, 100% lump) export offers remained unchanged and more than 3,000 MT deals were concluded to Bangladesh at around USD 286-288/MT CPT Benapole (dry port of India & Bangladesh), equivalent to USD 300-305/MT CFR Chittagong, Bangladesh.

-- Induction grade billet (100*100 mm) export deals reported to Nepal at around USD 398-400/MT ex-mill at Durgapur, equivalent to USD 425/MT CPT Nepal.

-- In the beginning of week, an eastern India based large scale mill has concluded billet export deal to Nepal for four rakes (equivalent to 11,000 MT) near to USD 430-435/MT ex-mill & equivalent to USD 445-450/MT CPT Raxaul/Jogbani border.

-- SAIL received poor response in pig iron offers from Bhilai Steel Plant. The company has allotted to sell about 20,000 MT basic grade pig iron at INR 28,200/MT ex-plant on 15th Feb'20, however only about 2,000 MT bookings were made by local traders and furnaces as well. While, the remaining about 90% material remained unsold.

-- SAIL's Rourkela Steel Plant tender held on 19th Feb'20 to sell about 2,450 MT steel grade pig iron, got weak response. The base price for the tender was quoted by RSP at INR 27,800/MT and only 10% of the material offered got booked.

FINISH LONG

Indian finish long steel market observed moderate response in terms of trade activity and as per our weekly assessment rebar price range fluctuated by INR 100-400/MT in most of the locations except in the southern region where finished steel prices remained downward.

Further, nominal material lifting notified only with specific locations and no major trade volume reported through trade sources due to considerable hike in conversion spread that is rebar guage parity.

Initially its being done in central region Chhattisgarh w.e.f. 18'Feb and further being followed by Wardha with same date & after couple of days i.e. 20'Feb in Hyderabad.

-- Currently rebar gauge parity registered at INR 3,000/MT for (10-25 mm) & INR 4,000/MT (8 & 32 mm) in above mentioned markets.

-- Current trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 32,900-33,200/MT Ex Raipur (central region), INR 35,400-35,700/MT Ex-Jalna (western region) & INR 34,700-35,000/MT Ex Chennai (south region).

-- Central region, Raipur based heavy structure manufacturers have maintained trade discount by INR 100-300/MT and trade reference prices at INR 35,700-36,100/MT (200 Angle) ex-work.

-- Trade discounts in Raipur wire rod is currently at INR 300-500/MT and trade reference prices stood at INR 32,300-32,500/MT ex-Raipur and INR 32,500-33,000/MT ex-Durgapur, size 5.5 mm.

FINISH FLAT

This week trade participants shared that domestic HRC prices softened further by around INR 500-750/MT. Traders had already purchased good quantities earlier in fear of further increase in prices and are holding decent stock in hands.

Thus, the current trade reference prices for HRC stands at INR 38,500-39,000/MT ex-Mumbai, INR 38,250-38,500/MT ex-Delhi, and INR 39,250 - 40,000/MT ex-Chennai. And the trade reference CRC (0.9 mm, IS 513) prices on a weekly premise assessed at INR 45,000-45,500/MT ex-Mumbai, INR 42,700- 45,000/MT ex-Delhi, and INR 45,500-46,000/MT ex-Chennai. Prices mentioned above are basic, and extra GST @ 18% will be applicable.

Prices may soften further towards the month end if demand doesn't pick up in the domestic market. Also, traders are trying to liquidate the inventory ahead of end of financial year.

Reference Prices as on 22nd February 2020 (Week 8)

Prices are Ex-works, Exclusive of GST at 18%

Indian Export Reference Prices as on 22nd Feb'20

Prices in USD/MT
Source: SteelMint Research