Weekly: Indian steel market snapshot

Indian secondary steel market has observed volatility in prices during week 11. Prices in other locations witnessed a rise, however in Southern India, it fell slightly due to competitive offers from neighboring markets.

As per SteelMint's assessment, the semi-finished steel market has noticed a rise in prices by INR 100-900/t in billets and INR 200-600/t in sponge iron in Central, Eastern & Northern regions. However, in Southern India the prices fell by INR 200-400/t, w-o-w.

In addition to it, the finished long steel market was supported and rebar prices increased by INR 300-1,100/t in Northern, Central, and Eastern regions on account of active trade activities.

In context to finished flat, HRC trade prices reported a sharp increase of around INR 1,500-2,000/t in Northern India, whereas, a hike of INR 750-2,000/t was noticed in other locations.

Iron Ore and Pellet

• OMC had scheduled an iron ore e-auction on 10th Mar for 882,000 t iron ore fines. 86% of material put to auction was booked. The bids have fallen sharply upto INR 1,200/t against the last e-auction conducted on 7th Jan in line with the price drop seen in the merchant market on improving supplies.
  
  
• SAIL conducted an auction on 9th Mar for 104,000 t iron ore fines (Fe 60.8% grade) from its Barsua mines in Odisha and received bids at the base price for the entire quantity offered at INR 2,250/t (loaded, excluding royalty). In another auction conducted an auction on 10th Mar'21 for 240,000 t dump iron ore fines (Fe 60% grade) from its Bolani mines in Odisha. The company received bids for the entire quantity at INR 2,900-2,920/t excluding Royalty and other taxes.
  
  
• NMDC is going to conduct two iron ore auctions - 651,000 t from Bacheli mines and 50,400 t from Kirandul mines, Chhattisgarh. Both the auctions are scheduled for 17 Mar '21.
  
  
• SteelMint's bi-weekly domestic pellet index "PELLEX " continues to remain stable at INR 12,150/t, DAP Raipur.
  
  
• SteelMint's weekly low-grade Indian iron ore fines (Fe 57%) export index has decreased sharply by $11/t w-o-w to $88/t FoB east coast India.
  
  
• SteelMint's weekly pellet export index (FOB east coast India) for Fe 64% grade has decreased sharply by $8/t w-o-w to $177/t.
  
  

Coal

Australian coking coal prices continued to fall throughout the week, due to limited spot demand from end-users in ex-Chinese markets. Spot transactions reported for premium coking coals were concluded at lower price levels as sellers reduced offers to attract buyers.

• Latest offers for the Premium HCC grade are assessed at around $115.50/t FOB Australia, $219.00/t CNF China and $137.15/t CNF India.
  
  
• Portside prices for South African RB2 (5500 NAR) coal remained almost flat at INR 5,500/t ex-Gangavaram this week. While sellers raised their offers to INR 5,800-5,900/t, buyers showed reluctance to accept it.
  
  
• In terms of imports API4 index averaged at around $88/t this week while discounts for RB2 and RB3 were heard at $14-$15/t and $25-26/t respectively. The freight between RBCT to Gangavaram port has been assessed at $20.5/t.
  
  

Ferrous Scrap

Imported scrap offers have plunged sharply this week tracking global price trends. However, trades have slowed down as buyers have opted to wait for prices to come down further. Imported scrap prices in India have declined significantly by $20/t w-o-w.

Although yard owners have not slashed their offers, traders are ready to sell their high seas material at even lower levels. Buyers are still preferring domestic substitutes of sponge iron & melting scrap over imported.

• SteelMint's assessment for containerized shredded of UK/US origin stands at $445/t CFR Nhava Sheva level, registering a sharp fall of $25/t w-o-w.
  
  
• HMS 1 from UAE is being offered at $410-420/t CFR level, down by $25/t w-o-w.
  
  

Ferro Alloys

• Silico Manganese prices escalated to more than a decade high owing to increased supply shrinkage in the domestic market. Producers are booked till April and are offering only May deliveries for exports.
  
  
• Ferro Manganese prices increased amidst bullish steel market sentiments. Meanwhile, there is only a handful of ferromanganese producers active in the domestic market.
  
  
• Indian ferrochrome prices remained stable w-o-w, amidst slow buying interest from the domestic buyers. Meanwhile, the producers are waiting for the upcoming chrome ore auctions, which will give further clarity on the offering levels.
  
  
• Ferrosilicon prices rebounded in Bhutan to INR 98,000/t as producers are overbooked and have low selling pressure. Meanwhile, producers in Meghalaya are facing power cuts which is affecting production by around 40-50%. Thus, offers from Meghalaya are at around INR 100,000/t Ex-works.
  
  

Semi Finished

On weekly basis, the Indian semi-finished (Billet) prices increased by INR 100-900/t with a major rise seen in North (Mandi Gobindgarh) & Central India (Raipur & Raigarh), however in South India (Chennai) offers declined by INR 300/t w-o-w.

Similarly, Sponge offers rise by INR 200-400/t w-o-w in major locations except in Southern India (Bellary) where prices remained downward.

• Vizag Steel has floated an export tender for 20,000 t blooms (200×200 mm, 3SP/4SP grade) at 100% advance payment terms for the end-Apr'21 shipment and is due on 16 Mar '21.
  
  
• SAIL has floated tenders for 10,800 t wire rod and 16,200 t blooms from IISCO Steel Plant, Burnpur, and 16,200 t billets from Durgapur Steel Plant. The due date of the billet and bloom tender is 16 Mar'21 while the wire rod tender is due on 17 Mar'21.
  
  
• An Indian state-owned mill concluded an export tender of 16,200 t billets (150*150 mm, 4SP/5SP grade) at $551-553/t, FoB.
  
  
• SAIL has scheduled an auction for 10,650 t basic grade pig iron on 16 Mar '21 from its Bhilai Steel Plant, Chhattisgarh.
  
  
• Induction grade billet export offers up by $5-10/t to around $530/t exw Durgapur (equivalent to $555/t CPT Nepal). However, demand was slow on the revised offers, as per trade sources.
  
  
• Indian sponge iron export offers are mostly stable at around $390-395/t CPT Benapole (equivalent to $405-410/t CFR Chittagong, Bangladesh) & about 7,000 t deals reported this week.
  
  
• Steel grade pig iron prices slightly up by INR 200-700/t (w-o-w) across markets on account of moderate demand-supply & surge in billet prices.
  
  

Finished Long

India's finish long steel market observed a mixed trend in terms of prices and demand.
Likewise in North, Central, and in Eastern regions rebar steel prices increased by INR 300-1,100/t w-o-w, owing to active trade activities and fluctuating semi-finished steel prices supported manufacturers to kept their offer high.

Whereas in Western and Southern regions, due to comparatively higher prices from other competitive markets and moderate demand in rebar, manufacturers slightly adjusted offers by INR 100-300/t except in Bangalore market where prices reduced by INR 1,000/t SteelMint assessment shows.

• Trade reference rebar prices of 10-25 mm through midsized mills assessed at INR 42,400-42,700/t exw Raipur, INR 46,300-46,700/t exw Jalna.
  
  
• Trade discount given by Raipur based heavy structural steel manufacturers is at INR 1,000-1,300/t and trade reference price of 200 mm Angle is stood at INR 45,100-45,500/t exw Raipur.
  
  
• Trade discounts in Raipur wire rod are currently at INR 800-1,000/t and trade reference prices stood at INR 42,300-42,500/t exw Raipur & INR 42,500-42,700/t exw Durgapur, size 5.5 mm.
  
  

Finished Flat

Indian HRC trade prices reported a sharp increase of around INR 1,500-2,000/t especially in Northern India including Faridabad, Ludhiana, and Delhi.

In other markets trade prices of HRC increased by around INR 750-1,000/t meanwhile, as per SteelMint benchmark price assessment for 2.5 mm thickness, HRC increased by INR 250/t INR 54,000-54,500/t exy-Mumbai w-o-w.

Why are we observing an uptick in HRC prices?

• Trade participants mainly from the northern and western region shared that demand is picking up. Sales are good as compared to last week and buyers have accepted these prices.
  
  
• Traders are facing a shortage of thinner gauge HRC in the domestic market due to increased exports in the last few days. This may drive domestic HRC prices.
  
  
• Growth in two-wheeler and passenger vehicle sales resulted in increased consumption and lead to an uptrend in HRC prices
  
  

Near-term outlook - Indian mills are planning to increase domestic HRC prices in line with changing situations in the international market. Also, mills have cushioned themselves by exploring export avenues at competitive pricing.

Reference Prices as on 13th Mar'21 (Week 11)
Prices are exw & exclusive of GST

Indian export reference prices as on 13th Mar'21
Prices in $/t
Source: SteelMint Research