Indian Steel Market Weekly Snapshot

Indian Iron & Steel market remained on down trend during the Week-47 (19-24 Nov’18) as the prices dipped owing to lack of domestic & export inquiries. Supply of across all products was healthier, while demand lessened.

During these days, the prices of Semis & Finished long steel products fall in the range of INR 200-1,000/MT (USD 3-14) in across major Indian markets. Further in the duration, flat steel offers were also corrected by INR 500-1,000/MT over limited trade activities.

Iron ore & Pellets: Odisha's major merchant miner- Essel Mining and Industry has reduced iron ore lump prices to INR 6,725/MT (Fe 65% lumps) but Fines prices have remained unchanged.

Serajuddin Mines has also corrected iron fines and lump prices & offers for Fe 63% fines are around INR 2,300/MT and for 5-18 mm (Fe 63%) around INR 5,100/MT (ex-mines, including Royalty, DMF & NMET).

As per participants, one of the Central India (Raipur) based pellet manufacturers have concluded a bulk deal of around 100,000 MT pellets. The deal was heard to have concluded by around 16 parties in Raipur at an average price of around INR 6,500/MT (ex-Raipur, GST extra). Central India (Raipur) pellet offers have decreased further sharply and hit almost 4-month low.

-- Recently Monnet Ispat and Energy Limited has commenced pellet sales in the merchant market. Current offers from pellet maker has assessed at INR 7,000-7,100/MT (Ex- Raigarh).

-- Indian crude steel output moved up by 3% to 8.77 MnT in Oct’18 which was 8.52 MnT in Sep’18 - WSA.

Indian imported scrap market remained stalled on falling steel prices in local market. Strengthening of INR against USD and sharply falling scrap prices outside India prompted importers to wait despite rising enquires. Buyers eye further price drop to secure more scrap while local scrap prices moved down in major markets by INR 500-1,000/MT (USD 7-14).

Offers for containerised Shredded from Europe and UK moved down by USD 8-10/MT W-o-W to USD 347-355/MT, CFR. Limited trades for Dubai HMS 1 heard in the range USD 330-335/MT & West African HMS 1&2 assessment remains at around USD 318-320/MT, CFR Nhava Sheva.

The seaborne coking coal market continues to remain quiet with muted trading activity as both buyers and sellers stay on the sidelines amid a drop in domestic coke prices in China owing to the weakening steel market.

In China, with ports exhausting their coal import quotas, the National Development and Reform Commission (NDRC) has enforced import restrictions since last week that stopped the purchase of imported coal till further notice.

Nevertheless, supply concerns coupled with firm Chinese demand is preventing a decline in seaborne coking coal prices because there is a scarcity of spot cargoes on offer at the moment.

Consequently, offer levels for premium hard coking coal hover at around USD 225-230/MT FOB Australia as a result of tight spot supply. Further, the latest prices for the Premium HCC and 64 Mid Vol HCC grade are assessed at around USD 225/MT and USD 195/MT FOB Australia, respectively.

For Indian buyers, the above offers amount to USD 235/MT and USD 207/MT respectively on CNF India.

Semi finished: Indian Billet offers remain on down trend & declined by INR 500-1,000/MT on weekly basis due to poor off take in finished steel products.The industry experts reported selling pressure with the producers on piled up inventories.

Further, Sponge iron offers being reduced by INR 200-700/MT in major markets. In line Central & South Indian sponge prices fall to 3 month's low on limited trades, as similar offers was recorded during mid of Aug'18.

-- Sponge iron export offers from eastern India remain unmoved over strong Rupee against US dollar although domestic sponge prices witnessed a slump. The current offers for lumps of grade FeM 78-80, stand at USD 340-345/MT CPT Benapole (dry land port of Bangladesh & India) & USD 360-365/MT CFR Chittagong, Bangladesh.

-- The mid size mills in Eastern India reported limited export deals to Nepal and slight fall in offers following slump in domestic prices. The prices for induction grade (100*100mm) Billet stood at USD 450-455/MT & for Wire rod 5.5mm commercial grade at around USD 540/MT ex-mill, Durgapur, East India

-- RINL has concluded export tender to Nepal for Billet (90*90 mm) at around USD 480/MT for 2,709 MT (equivalent to 1 rake) & Bloom (150*150 mm) at close to USD 455-460/MT for 5,418 MT (2 rakes), ex-mill -Sources.

-- RSP (Rourkela Steel Plant) tender held on 19th Nov'18 to sell about 6,000 MT steel grade pig iron have received good response. The base price of the tender was at INR 28,700/MT and the total quantity have been sold out at INR 28,850-28,900//MT (ex-plant).

-- As per sources, SAIL has offered Steel grade Pig iron at INR 28,800/MT from its IISCO plant based in West Bengal. However buying interest reported at less price by INR 500/MT.

-- Jindal Steel has rolled over Pig iron prices at INR 30,000/MT (Steel grade) ex-plant, Raigarh. However the company slightly raised prices of Panther shots (granulated pig iron) at INR 28,200/MT as against last deals at close to INR 28,000/MT ex-plant, Odisha.

-- SteelMint's Pig iron export price assessment stood at USD 365-370/MT FoB India, USD 345-355/MT FoB Brazil and USD 360-365/MT FoB Black sea.

Finish Long Steel Market registered price corrections due to lack of appropriate trade volume amid weak sentiments. Also surplus inventories urged industrialists to maintain productions as per demand through the traders/retailers.

On weekly basis, price range down by around INR 800-1,000/MT (TMT & Structure) in major producing markets.

Further, Raipur based Heavy structure manufacturers have lessened discount range to INR 600-800/MT and current trade reference prices at INR 41,400-41,800/MT (200 Angle), upon booking quantity.

Current trade reference rebar prices (12-25 mm) assessed at INR 36,600-37,000/MT Ex- Jalna & INR 35,500-35,700/MT Ex- Raipur, excluding GST.

-- As per sources, Indian Large Mills has not made any announcement on long products price revision in current week. Although traders/stockist reduced offers in rebar by around INR 500/MT in specified locations on account of low buying. The current trade reference prices for 12 mm rebar by large Steel producers stood at INR 43,500-44,000/MT (ex-Delhi).

-- As per recent conference call of Q2 FY19, Jindal Steel and Power Ltd (JSPL) had already delivered 40,000 MT of rails, out of close to 96,000 MT order received first from the Indian railway, which delivery target is about 12 months.

-- Wire rod trade discount offered by the mid size manufacturers & suppliers in Raipur is almost unchanged compare to last week which is now at around INR 1,000-1,300/MT

Finish Flat Steel: This week domestic HRC prices in India have witnessed decline of INR 500-1,000/MT against last week amid bearish market sentiments along with competitive offers from major exporting nations like China and Japan.

-- The current trade reference prices for HRC (IS2062) 2.5 mm-8 mm is around INR 46,000/MT (ex-Mumbai) & INR 46,500-46,700/MT (ex-Delhi).

-- The prices for CRC (IS513) 0.9 mm is hovering in the range of INR 51,000-51,500/MT(ex-Mumbai) & INR 53,000-53,500/MT (ex-Delhi). The prices mentioned above are basic, excluding GST & on cash payment basis.

As per our analysis, imported HRC from China is competitive as landed cost to India will stand around INR 44,000/MT (ex-Mumbai) against prevailing domestic HRC offers, this has put pressure on Indian manufacturers. Hence domestic mills are heard to have offering discounts/rebates to escalate buying interest.

Thus it is anticipated that major Indian manufacturers likely to decline domestic HRC prices for Dec deliveries.

Indian Raw material and Finished Steel reference Prices as on 24 November 2018 (Week 47)

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

Indian Export Reference Prices as on 24th November'18

Prices in USD/MT
Source: SteelMint Research