Weekly round-up: Indian steel prices headed north amid low trade

The Indian steel market observed an upward trend in terms of prices due to hike in OMC's iron ore auction prices in the 23rd week of the year. However, trade volumes were limited throughout the week.

As per SteelMint's assessment, domestic billet prices increased by INR 1,400-3,100/tonne across regions with the highest increase of INR 2,700-3,100/t seen in Durgapur, Rourkela and Raigarh. Similarly, sponge iron prices also moved up by INR 1,800-2,900/t.

Meanwhile, induction furnace-route rebar offers moved up on account of higher raw material prices and positive sentiments. Prices surged by INR 1,000-2,800/t w-o-w, in most of the major supplying markets.

Domestic HRC and CRC prices too increased sharply by around INR 3,000-4,000/t for Jun’21 deliveries to reduce the gap between international and domestic pricing.

Iron ore and pellets

• OMC’s e-auction of 619,000 t of iron ore lumps was concluded at an average of 42.8% over the set base price. The entire quantity offered got booked.
  
  
• SAIL conducted an auction on 4 Jun’21 for 24,000 t of iron ore fines from its Dalli mines in Chhattisgarh. The company received bids for the entire material on offer at INR 7,900/t (loaded, including royalty, DMF, NMET and additional royalty as per the MMDR Amendment).
  
  
• India's iron ore export market picked up during the week due to rising Chinese demand. SteelMint's weekly low-grade Indian iron ore fines (Fe 57%) export index increased by $9/t to $96/t, FoB east coast India, as per latest reports.
  
  
• SteelMint's bi-weekly domestic pellet index "PELLEX" stood at INR 500/t to INR 16,300/t, DAP Raipur. A couple of Raipur-based pellet makers are not offering material in the merchant market owing to recently-concluded export bookings.
  
  
• SteelMint's Indian pellet export index (Fe 64% 3% Al, FoB east coast) recorded a hike of around $9/t w-o-w and stands at $222/t. Buying sentiments in China improved with quoted offers finding acceptance, turning Indian pellet makers active in exports.
  
  

Coal

• Australian premium hard coking coal prices continued to surge this week, on strong demand in the ex-Chinese Asian markets amidst supply concerns for cargoes to be delivered in Jul-Aug'21.
  
  
• However, market sources are expecting that buyers may retreat, as prices are moving up fast. Moreover, Indian buyers are not in a hurry to procure cargoes, as they are stocked up for Jun-Jul'21.
  
  
• Latest offers for the Premium HCC grade are assessed at around $167.00/t FOB Australia, $282.75/t CNF China and $191.60/t CNF India.
  
  
• South African RB2 portside prices this week surged by INR 400/t w-o-w basis and have been assessed at INR 7,950/t ex-Gangavaram.
  
  
• South African RB1 prices rose further by $4.8/t w-o-w basis to $112.8/t this week. Discounts for RB2 and RB3 were assessed at $19/t and $29/t respectively.
  
  

Ferrous scrap

Imported scrap trade in India slightly improved after limited deals in the past few weeks. Imported scrap offers to India moved up significantly by around $20/t against the prices reported by SteelMint on 1 Jun'21. With the government allowing supply of oxygen to certain industries on a "temporary basis", inquiries for scrap purchases have picked up.

• SteelMint's assessment for UK/Europe-origin containerised shredded scrap stands at $515-520/tonne (t) CFR Nhava Sheva, increasing considerably by $10-20/t week-on-week (w-o-w).
  
  
• A large Indian steel mill booked around 1,500 t of shredded scrap in containers recently on high seas earlier this week, as per SteelMint reports. The deal was concluded for UK/Europe-origin shredded scrap at $510/t, CFR Nhava Sheva, sources confirmed.
  
  
• Fresh offers for UAE-origin HMS 1 are now at $480-485/t and HMS 1&2 (80:20) at $475-480/t CFR , registering a sharp hike of around $20/t w-o-w. Few deals were also heard at quoted offers.
  
  

Ferro alloys

• Indian silico manganese prices were at around INR 94,000-95,000/t both in Raipur and Durgapur for the HC 60-14 grade. Producers reported good demand in the export market which is driving up prices, while major exporters are offering Aug-Sept'21 shipments.
  
  
• Indian ferro manganese prices increased in line with better demand from the exports market and higher silico manganese prices are good news for the smelters. Currently, prices are at around INR 95,000/t ex-Raipur and Durgapur for HC 70% grade.
  
  
• Indian ferro chrome prices increased to INR 92,000/t this week amidst supply shortage in the domestic market. Meanwhile, the demand for ferro chrome is high, as buyers worry over the availability of ferro chrome in the market.
  
  
• Indian ferro silicon prices increased further to INR 135,000/t ex-Guwahati and Bhutan to INR 120,000/t exw. The supply and dispatch situation remains affected from both the areas due to lockdowns and truck unavailability.
  
  

Semi-finished

Indian semi-finished steel prices increased sharply. As per SteelMint’s assessment, domestic billet prices increased by INR 1,400-3,100/t across regions with the highest increase of INR 2,700-3,100/t seen in Durgapur, Rourkela and Raigarh. Similarly, sponge iron prices also rose by INR 1,800-2,900/t.

• On 4 Jun’21, SAIL scheduled an auction for 6,000 t of basic grade pig iron from the Durgapur Steel Plant in West Bengal and the entire quantity was booked at a weighted average price of INR 38,750/t-exw.
  
  
• Vedanta Resources kept pig iron offers unchanged for the Gujarat market while the foundry grade material was being offered at INR 46,000/t, FoR Gujarat.
  
  
• Tata Metaliks Ltd (TML) reduced the basic grade pig iron prices by INR 1,400/t to INR 39,900/t ($545), for Jun'21 deliveries in Kolkata and Howrah markets.
  
  
• SAIL conducted an auction for 8,550 t (three rakes) of basic grade pig iron on 2 Jun'21 from its Bokaro Steel Plant, Jharkhand. The entire quantity was booked at INR 37,200/t-exw.
  
  
• Indian sponge iron export offers rose this week by $35-40/t following gains in domestic prices and fresh offers hovering around $480/t CPT Benapole, equivalent to $500-505/t CFR Chittagong, Bangladesh. However, the last deals were reported at about $450/t CPT, equivalent to $470/t CFR Chittagong.
  
  
• Steel grade pig iron prices surged by up to INR 2,000/t with a rally in iron ore prices. The major rise was seen in the eastern and northern regions by INR 1,500-2,000/t followed by INR 1,000/t in the central region.
  
  
• Induction grade (IF) billet export offers increased by $35/t this week with fresh offers at around $605/t-exw-Durgapur (equivalent to $630/t CPT Nepal). Meanwhile, fresh offers of blast furnace (BF) grade billet were reported at around $665/t CPT Nepal, through an eastern India-based primary mill.
  
  

Finished longs

Finish long steel via the induction furnace (IF) route witnessed a rising trend this week in terms of prices, on the back of higher raw material prices and positive sentiments among traders. Prices of rebar steel surged by INR 1,000-2,800/t w-o-w, in most of the major supplying centres . However, manufacturers in a few specific markets in western India marginally increased their prices by up to INR 500/t owing to higher inventories at mills. Limited buying inquiries in the spot trade market kept rebar prices under pressure as compared to other competitive markets. In terms of demand and trade activities, prices remained moderate across region, sources told SteelMint.

• Trade reference induction grade rebar prices of 10-25 mm were assessed at INR 46,600-46,900/t-exw Raipur, at INR 48,700-49,000/t-exw Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers stood at INR 200-500/t and the trade reference prices of 200 mm angles were at INR 49,800-50,200/t-exw Raipur.
  
  
• Trade discounts given by Raipur-based wire rod manufacturers were up to INR 1,000/t and trade reference prices stood at INR 46,700-47,000/t-exw-Raipur, INR 47,000-47,200/t-exw-Durgapur, 5.5 mm.
  
  

Finished flats

• This week, Indian steel mills sharply raised their HRC and CRC prices by around INR 3,000-4,000/t for June deliveries to reduce the gap between international and domestic pricing. The recent hike by major Indian steel mills for HRCs now stands at INR 70,000-70,500/t and CRCs at INR 85,000-87,000/t. Prices are on an exy-Mumbai basis.
  
  
• There is a large disparity between global and domestic prices providing enough headroom to Indian steel mills to lift prices in local markets. Chinese steel mills are offering HRCs at around $1,020-1,030/t CFR India and Japanese mills are offering HRCs at $1,100/t CFR basis.
  
  
• Indian steel mills have resumed HRC export offers to the UAE at around $1,060-1,080/t CFR.
  
  
• Steelmakers are expecting pent-up demand as Covid cases in India are declining, which triggered a price hike in domestic markets.
  
  

Along with this, SteelMint’s benchmark prices for 2.5 mm HRCs stand moderate at INR 66,000-67,000/t (exy Mumbai), up by around INR 2,000/t against last week. The prices mentioned do not include GST @18%. However, the traders’ market may find it difficult to absorb the price hike.

Automakers posted lower sales of vehicles last month. With the arrival of the monsoon from mid-June , construction activities will remain halted. Also, demand in the monsoon usually remains sluggish. Thus, limited buying may drag down prices in the near term.

Reference prices as on 5th June'21 (Week 23)
Prices are exw & exclusive of GST

Indian export reference prices as on 5th June'21
Prices in $/t
Source: SteelMint Research