Monthly Archives: September 2017

Indian Steel Market Highlights, Week 40

Indian Steel market moved down further in week-40 (29th Sep) as domestic Semis and Finished offers registered fall of INR 400-1,200/MT (USD 6-18), W-o-W.

In current circumstances trade activities remain dull owing to an inert mood of buyers and festive holidays.

Raw Material: Indian private miner like, Serajuddin Mines from Odisha was supposed to resume iron ore dispatches from Wednesday (27/09/17) post physical verification of stocks after the official clearance according to the latest update.

According to participants, market price based on index should be around 113-114/MT CFR, China but Chinese mills were willing to pay a premium for prompt delivery and high quality due to sintering and pelletizing restriction imposed by Chinese government in key steel producing areas. However domestic pellet prices have gone down by INR 200-300/MT owing to falling sponge prices.

Meanwhile, Imported scrap offers to India have come down by around USD 10-20/MT W-o-W, however buying interest seen around USD 15-20 lesser than present levels. Also, buyers preferred domestic scrap over imported one. As per assessment offers for HMS 1&2 (80:20) in containers for Dubai origin stood in the range of USD 290-300/MT, CFR Nhava Sheva. Offers for Shredded scrap also fell in this week for both UK and Europe origins and now assessed in the range of USD 310-320/MT, CFR Nhava Sheva. Indian domestic scrap fall by INR 500-700/MT (W-o-W) and are assessed at INR 20,000-20,200/MT ex-Mumbai for HMS grade.

Coking Coal: Coking Coal prices are now sliding down, after a wave of steep rise. The main driver of the downward traversal in the prices is the erosion of demand arising on account of the bearish sentiments among the Chinese steel makers due to the imminent steel production cuts to be implemented in China. Offers for the Premium HCC have declined to around USD 202-203/MT CFR India against last week at USD 221-223/MT and further down slides are on the anvil.

Indian Steel Market Highlights, Week 39

Semis Finished Steel: Domestic billet and sponge offers continue to fall since start of the month amid weak demand and lower export orders. In a week’s duration, domestic Sponge & Billet offers fall in the range of INR 400-1,200/MT (USD 6-18). In the period major fall in sponge iron seen in Central India by INR 1,000/MT (USD 15) & for Billet in Western India by INR 1,200-1,300/MT (USD 18-20).

On weekly basis, Indian billet export offers fall by USD 15-20/MT following the downtrend in global market. Steel Authority of India (SAIL) had floated a tender for export of around 18,000 MT billets. According to market sources report to SteelMint, the company received bids around USD 475-480/MT, FoB India. If sources are to be believed the company seems to have cancelled the export tender as they were expecting higher bids. SteelMint’s billet export price assessments are stood at USD 490-500/MT FOB India against last week at USD 520/MT FoB.

Further, Indian domestic pig iron market offers decline around INR 500/MT (USD 8) due to falling steel prices in the country and slump in global coking coal & scrap prices. Following the trend export offers also slip by USD 10/MT W-o-W and are evaluated at USD 370-390/MT, FoB India.

Finish Long Steel Market: With decline in semis market the Finished long offers registered fall of INR 400-1,100/MT on weekly basis in Rebars and the major price fall seen in Mumbai (Western India).

Flat Steel Market: India witnessed further decline in flat steel prices by INR 500-700/MT, W-o-W. Ongoing festive holidays amid weak buying interest in domestic market resulted to fall in prices. Domestic markets are likely to resume trade activities from next week.

Besides this, arriving import bookings are also another factor pressurising domestic prices.

Indian Raw material and Finished Steel reference Prices as on 29 Sept (Week 40)

Products Regions Taxes Prices in INR/MT W-o-W
Pellet Fe 63%, 6-20 mm Ex-Barbil,Loaded to wagon GST at 5% Extra 5300 0
Iron ore Fe 62%, 10-30 mm Joda loaded to wagon Incld Royalty, DMF & NMET, GST at 5%Extra 3750 0
Coking Coal, Premium HCC CNF India Prices in USD 202.70 -19.05
Scrap HMS (80:20) Ex-Mumbai GST at 18% Extra 20200 -700
C-DRI 80 FeM Ex-Raipur GST at 18% Extra 16500 -1200
P-DRI 80 FeM Ex-Raipur GST at 18% Extra 15200 -800
Pig iron Steel grade Ex-Raipur GST at 18% Extra 25800 0
Billet 125*125 MM Ex-Raipur GST at 18% Extra 26100 -600
Rebar (12mm) Ex-Raipur (Medium Scale) GST at 18% Extra 29000 -600
Wire Rod (5.5 mm) Ex-Raipur GST at 18% Extra 30900 -400
Structure ( 40 Angle) Ex-Mumbai GST at 18% Extra 30700 -733
HRC (2.5-8 mm) Ex-Mumbai GST at 18% Extra 38000 -750
CRC (0.90mm) Ex-Mumbai GST at 18% Extra 42500 -500
HR Plate(5-10mm) Ex-Mumbai GST at 18% Extra 37500 -500

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

Indian Export Reference Prices

Commodity Size and Grade Prices 1W 1M
Pellet Fe 64% 109 109 102
Billet 150*150 mm 490 520 510
Pig Iron Steel Grade 370 380 360
HRC 2.5-8mm, IS 2062 600 600 590

Source: SteelMint Research

 

Global Ferrous Scrap Market Overview-Week 40

This week Turkey witnessed further fall in the imported scrap prices. Imported ferrous scrap markets in India, Pakistan and Bangladesh followed the price fall in Turkish market and showed a drop upto USD 20-25 in offer levels, Buyers in these markets seek a week’s time to get clarity and indicate further drop in offers by USD 10-15, however, no bulk vessel booked this week by them.

Turkey’s imported scrap offers fall upto USD 27/MT W-o-W –This week Turkish market has witnessed sharp fall in offers by around USD 15/MT on W-o-W basis. A scrap supplier Aim Ontario from Canada surprisingly sold 1,50,000 MT scrap aggressively at various averaged price levels to different leading scrap buyers from Turkey. Assessment for US origin HMS now stood at USD 308/MT, CNF Turkey. Many traders indicated softening of the market further by USD 5-10/MT but it is hard to fall sharply further over the upcoming winter.

Indian scrap offers mostly stable, buying remains subdued – Imported scrap offers to India have come down this week sharply by USD 10-20/MT W-o-W, however buying interest seen around USD 15-20 lesser than present levels. Buyers preferred domestic scrap over imported one as price gap still persists between them.

As per assessment offers for HMS 1&2 (80:20) in containers for Dubai origin stood in the range of USD 290-300/MT, CFR Nhava Sheva down by USD 10-15 than last week’s assessment. Offers for Shredded scrap also fell in this week for both UK and Europe origins and now assessed in the range of USD 310-325/MT, CFR Nhava Sheva.Buying activities remain dull owing to an inert mood of buyers and festive holidays for Dussehra.Most of the participants indicated to wait for reopening in next week as present prices seemed a bit volatile.

As per recent vessel line up data maintained with SteelMint, a new bulk scrap import vessel is reported in India. A vessel named ‘Pelagiani’ carrying 33,000 MT ferrous scrap is expected to arrive at Mundra port on 2nd Oct’17

Pakistan continued to trade in small-scale containers – Imported scrap offers in Pakistan continued downward movement further by USD 20-25 on W-o-W basis. Price assessment for HMS 1&2 from Dubai stood around USD 302-305/MT, CFR port Qasim while Offers for containerized Shredded scrap for UK and Europe origins assessed at USD 320-325/MT, CFR Port Qasim.Few bookings in containers heard to confirm at USD 320/MT level. Most of the participants were expecting that market to weaken further and prices to go down by USD 10-15.

Bookings in Bangladesh remain dull despite fall in offers – Imported ferrous scrap market in Bangladesh remained silent this week fewer enquiries heard but no bookings confirmed. Offers assessed for Dubai origin in containers for HMS 1 at USD 335-337/MT, CFR Chittagong while for Shredded at USD 345/MT, CFR Chittagong which has fallen by USD 15 on W-o-W basis. Buyers remained in ‘wait and watch’ mode and are likely to return to the market next week.

Global ferrous scrap reference prices – Week 40

Particulars Current Prices in USD/MT W-o-W 
HMS (80:20)from US, CNF Turkey 308 -27
HMS 1 & 2 from Dubai, CFR India 295-300 -15
HMS (80:20) from UK, CFR India 310 -10
Shredded from Europe , CFR India 318 -12
Shredded from USA , CFR India 330 -5
Shredded from US, CNF Pakistan 320 -15
HMS from Dubai,CNF Pakistan 305 -20
HMS 1 ,CFR Bangladesh 330 -5
Shredded,CFR Bangladesh 345 -15
HMS (80:20) from US, CNF Taiwan 287 -8
HMS (80:20), FoB Europe 290 -17

Source: SteelMint Research

 
Karnataka Iron Ore E-auction, Iron Ore

Karnataka Iron Ore E-auction Sales Up 85% in Aug’17

3.37 MnT iron ore sold via Aug’17 e-auctions, up by 85% M-o-M.

The month of Aug’17 witnessed sharp rise in purchases in Karnataka e-auctions.  The quantity of 3.37 MnT iron ore was sold in Aug’17 against 1.82 MnT in Jul’17, up 85% M-o-M. Aug’17 total iron sales quantity was considerably higher compared to last month.

NMDC sold 1.22 MnT iron ore via e-auctions in Aug’17- NMDC’s iron ore sales at e-auctions were up 3% M-o-M at 1.22 MnT in Aug’17. Out of the total allotted quantity 0.53 MnT was offered by Mysore Minerals and rest 1.62 MnT by private miners.

JSW Steel’s iron ore purchases from Karnataka stood at 2.42 MnT in Aug’17-JSW Steel’s iron ore purchases from Karnataka e-auctions stood at 2.42 MnT in Aug’17, up 131% M-o-M. Other major iron ore buyers in Karnataka e-auction last month were BMM Ispat, Minera Steel and Power, Thakur Industries, Janki Corp Ltd and MSPL.

Buyer-wise allotted quantity in Aug’17 e-auctions

Company

Fines

Lumps

Grand Total

JSW Steel Ltd

1792000

624000

2416000

BMM Ispat

164000

8000

172000

Minera Steel And Power

72000

19000

91000

Thakur Industries

22000

42000

64000

Janki Corp Ltd

24000

29000

53000

Others

172000

398900

570900

Grand Total

2246000

1120900

3366900

Qty in MT
Source: Karnataka DMG

Major highlights of Aug’17 Karnataka e-auctions:
1. Iron ore base prices of NMDC Donimalai mines were unchanged for the month.  For NMDC Donimalai mines booking prices were- fines (Fe 60.02%) – INR 2,076 and lump (Fe 62.5%) – INR 2,427/MT. For NMDC Kumaraswamy mines prices were- fines (Fe 61.5%) – INR 2,021/MT and lump (Fe 63%) – INR 2,480/MT.

2. Price scenario of sponge grade lump in Jun’17 Karnataka e-auctions – Sponge grade lump (Fe 63.5%, 10-20 mm ) offered by NMDC Kumaraswamy mines was base priced at INR 2,404/MT. The lot was sold at INR 2,734-2,744/MT.

3. Base prices of iron ore offered by a private miner, Vyasankere mines,  lump (Fe 65%) were unchanged M-o-M at INR 2,750/MT (basic).

4. Andhra Pradesh based steel maker Jeevaka Industries have sourced 7000 MT iron ore  form SMIORE and Goa based Vedanta Ltd have sourced one lot of  8,000 MT iron ore from P Balasubba Setty & Son.
Karnataka Iron Ore E-auction, Iron Ore

 

Chinese Steel Market Highlights- Week 40

Weakening domestic demand and falling steel futures has resulted to decline in Chinese steel prices along with raw material prices.This in turn leads to falling export offers of long and flat products in the global market. Besides this,National day holiday is scheduled in 1 Oct’17 due to which Chinese steel mills will remain shut for a week resulting in limited trade activities.

Iron ore trading activities remain thin– Benchmark index in China for Fe 62% fines fell below USD 63/MT, CFR China amid thin buying interest. Spot lump premium fell considerably to USD 0.36/MT amid less lump usage and pellet premium moved up to USD 50/DMT, CFR China.

Coking coal prices fall sharply by USD 17/MT W-o-W -Coking Coal prices continue to remain on downtrend owing to bearish demand sentiments in China. Offers for the Premium HCC have declined to around USD 189.50/MT FoB Australia against last week’s assessment of USD 208.5/MT, FoB.

Chinese domestic billet prices observe decline – Chinese domestic billet prices fell further this week. Domestic billet prices in northern China were recorded yesterday at RMB 3,530/MT (ex-works) against RMB 3,700/MT (ex-works) a week ago. Prices fell on dull demand. Falling domestic billet prices in China may give some room for exports. Assessment for Chinese billet export stood at around USD 500/MT, FoB.

Chinese HRC export offers plunged by USD 15-20/MT amid softening domestic market- Nation’s HRC export offers registered the decline of USD 15-20/MT W-o-W basis. Currently HRC commercial grade ASTM A36 export offers are prevailing in the range of USD 560-585/MT, FoB China.CRC export offers are assessed at USD 610-615/MT on FoB basis.

 Chinese Re-bar export offers started tumbling over domestic losses -Chinese re-bar export offers registered the fall this week by USD 15-20/MT and are assessed in range of USD 540-565/MT on FoB basis.Last week the offers was in range of USD 560-575/MT on FoB basis.Major mills in China has lowered re-bar export offers in order to generate more sales ahead of National day holiday which is scheduled in the first week of Oct’17.

Steel Raw Material & Finished Steel Prices in China

       Particulars Currency Current  
Prices
1 W 1 M
Spot Iron Ore Fines Fe 62%,
CNF China
USD 63 66 79
Iron Ore Concentrate in
Hebei Province, Fe 66%
(ex works)
RMB 660     700 730
Met Coke, 64%, FoB China USD 372 375 319
Chinese Domestic
Billet, ex-works
RMB 3,530 3,700 3,700
Billet 150*150 mm,
FoB China
USD 503 530 525
HRC, FoB China USD 560 580 565
CRC, FoB China USD 610 615 605
Rebar, FoB China USD 550 560     –

Prices in USD/MT
Source-SteelMint Research

 

HRC Import Offers to Vietnam Fall; Market Sees Limited Downside

Imported HRC offers to Vietnam saw correction on falling Chinese steel prices. Notably Chinese steel prices have corrected by USD 30/ MT since September beginning on rising inventories and falling raw material prices.

Current offers for 2 mm HRC grade SEA 1006 ( re-rolling grade) being assessed in the range of USD 560-580/MT CFR Vietnam.

“Imported HRC offers to Vietnam has dropped in last couple of weeks owing to Chinese prices. Current offers for re-rolling grade from China are at around USD 570-575/MT, from India at around USD 580-585/MT and Brazil at USD 560-565/MT CFR Vietnam.” said a re-roller based in Ho Chi Min city of Vietnam.

Buyers are hesitant to make fresh booking looking at sharp fall in prices, but I feel further downside from this level is unlikely, he further added.

Lower Chinese steel exports

Chinese steel production and exports will fall in coming months amid government’s guideline to curb pollution,specially in winter season.

Chinese government has already notified to stop sintering and pelletising process in some of the key steel producing regions.

China steel mill are expected to cut down their utilization levels to 50% during November – March from a current utilization level of 80%. Market expects this will cut down steel production in China by 45MnT.

Chinese steel exports during Jan – Aug 2017 are recorded at 54.27 MnT decline by 29% against 76.57 MnT during same period last year.

 

Japan Exports 0.3 MnT Billet in Aug’17 – Customs Data

Japan is the world’s 2nd largest steel producing country as well as 2nd largest steel exporter.

As per recent data released by Japan customs it is observed that the nation has exported about 300,000 MT Billet in Aug 2017.

The exports have registered an equivalent figure in Aug’17 & Aug’16 (Y-o-Y) against 300,000 MT in Jul’17. Taiwan maintains top destination of Japan’s billet exports in Aug 2017 as the nation has imported approximately 43% billet (130,000 MT).

Coming to total exports in CY17 (Jan-Aug), the nation has exported about 2.56 MnT Billet; down by 14.66% as compared to 3 MnT in the same preceding last year.

Prior to this, in CY16 (Jan-Dec) the country’s billet export was around 4.26 MnT & in CY15 at 4.56 MnT.

Country wise:-

During Aug 2017, the largest importer of Japan made Billet/Blooms was Taiwan, South Korea & United States which imported 130,000 MT, 90,000 MT & 40,000 MT respectively.

Similarly in the total Billet exports during CY 2017 (Jan-Aug), the major buyers of Japan made Billet was – Taiwan (40.63%), South Korea (31.13%), United States (10.79%), Thailand (7.13%) & Philippines (3.97%).

Key Updates

1. During Jan-Aug’17, Japan imported around 59.36% of iron ore from Australia, which was around 49.52 MnT current offer of Fe 62% Fines are at USD 53/MT FoB Australia.

2. Japanese H2 grade ferrous scrap export prices at Yen 32,500/MT (USD 290/MT) FOB Tokyo Bay

3. The export offers of 150*150 IS 2830 grade billet are currently at USD 490-510/MT FoB India & 125*125, Q235 China at USD 540/MT CNF Middle East.

Top Unload Countries (Jan’17 to Aug’17)  

Country Quantity % Share
Taiwan 1.04 40.63
South Korea 0.8 31.13
United States 0.28 10.79
Thailand 0.18 7.13
Philippines 0.1 3.97
Vietnam 0.05 2.15
China 0.05 2.04
Indonesia 0.03 1.18
Brazil 0.02 0.9
Netherland 0.04
India 0.03
Others 0.02
Grand Total 2.56 100

Quantity in MnT
Sources: SteelMint Stats.

 
Coking Coal Offers to India

Coking Coal Prices Move Southwards on Receding Demand

After a wave of steep rise in prices, Coking Coal prices in Australia are now reversing the path. The primary influence on the declining prices is the shrinking demand for the coal in the largest importing country—China.

The Chinese government will implement steel production cuts in that country very soon in its effort to lower atmospheric pollution.

In the first wave of the production cut, steel production will be halved in the north eastern city of Tangshan, the largest steel producing city in that country. The mandated production cut will take away 20 MnT of steel production, which is equivalent to around 7.5% of the total Chinese production. Similar production cuts will also be implemented in the other steel producing cities–Shijiazhuang, Anyang, and Handan.

Besides, it was also heard that the Chinese government will also impose restriction to lower Coking Coal production in that country by around 30%.

Due to the bearish sentiments prevailing in China, the steel makers there were forced to lower imports of Coking Coal —eroding demand for the coal in Australia.

Offers for the Premium HCC have comedown by around USD 17/MT to around USD 189.50/MT FoB Australia over the week-ago offers. Exhibiting a similar trend, offers for the 64 Mid Vol HCC have also declined by around USD 21.95/MT to around USD 153.05/MT FoB Australia in comparison with the offers in the week last.

For Indian buyers, these offers translate into: USD 202.70/MT and USD 166.25/MT respectively on CFR India basis.

 
Anthracite Coal Offers to India

Anthracite Coal Global Offers to Decline on Falling Coking Coal Prices

There has been no change in the Anthracite Coal market in India. The demand continued to be sluggish, with the buyers in the country preferring alternate fuels.

The global offers have not changed significantlyfrom the week-ago rates. However, there offers will decline in the near future as Coking Coal prices are moving downwards.
The latest Anthracite Coal offer is assessed at around USD 136/MT CFR India, almost unchanged from the offer assessed in the week last.

In India, Anthracite Coal imports were insignificant due to the prevalence of the lackluster demand. According to the data compiled by CoalMint Research, only 94,500 MT of the coal was imported in India during the 1-27Sep’17 period. The only importers were: JSW Steel, Sri Kalahasthi Pipes and Electrosteel Castings.

Besides, there is no prospect for the market in India to improve in the future.

 

Japan: Ferrous Scrap Exports Increased Marginally in Aug’17

Bangladesh doubled ferrous scrap imports from Japan in Aug’17.

Japan – a major exporter of ferrous scrap has witnessed marginal growth of 3% M-o-M in its ferrous scrap exports in Aug’17.As per recent customs data, Japan has exported 0.71 MnT ferrous scrap in Aug’17 compared to 0.69 MnT in Jul’17.

The country exported 5.33 MnT ferrous scrap during the period of first eight months of CY17 (Jan-Aug’17). A drop of 11 % Y-o-Y has noted in its exports against 5.97 MnT ferrous scrap exports in the same period in CY16.

On the yearly basis, ferrous scrap exports from Japan witnessed growth of 11% Y-o-Y in Aug’17.The country had exported 0.64 MnT ferrous scrap in Aug’16.

Japan mainly exports special grade H2 scrap along with other preferred grades as shredded, HS, Sindachi and H1.Major ports for scrap exports were Tokyo, Kobe, Osaka, Nigoya and Yokohama in Japan.

Japan FSEX Aug'17

South Korea remained preferred destination for Japan’s ferrous scrap exports –

South Korea continued to remain preferred destination for the Japanese ferrous scrap exports again with 2.53 MnT imports during Jan-Aug’17 followed by China (1.15 MnT), Vietnam (1.00 MnT) and Taiwan (0.33 MnT) respectively.

China’s scrap imports from Japan stood at 0.12 MnT, dropped 8% M-o-M in Aug’17.
South Korea imported 0.29 MnT ferrous scrap in Aug’17.while Vietnam imported 0.18 MnT ferrous scrap again in Aug’17.

Taiwan halved its ferrous scrap imports from Japan during Jan-Aug’17 against same time frame in CY16.

Bangladesh registered 100% hike with 0.04 MnT ferrous scrap imports from Japan in Aug’17 against 0.02 MnT imports in Jul’17.United States Imported 0.04 MnT in Aug’17 after remained silent for earlier three months.

Country wise Japan ferrous scrap exports –

Country Aug’17 Jul’17 M-o-M % Change Aug’16 Y-o-Y % Change Jan-Aug’17 Jan-Aug’16 % Change
South Korea 0.29 0.28 +3.57% 0.27 +7.41% 2.53 2.28 +10.96%
China 0.12 0.13 -7.69% 0.16 -25.00% 1.15 1.18 -2.54%
Vietnam 0.18 0.18 0.00% 0.12 +50.00% 1.00 1.46 -31.51%
Taiwan 0.02 0.07 -71.43% 0.06 -66.67% 0.33 0.68 -51.47%
Bangladesh 0.04 0.02 +100.00% 0.02 +100.00% 0.14 0.16 -12.50%
Others 0.06 0.01  +500.00% 0.01  +500.00% 0.18 0.21 -14.29%
Total 0.71 0.69 +2.90% 0.64 +10.94% 5.33 5.97 -10.72%

Quantity In MnT,
Source: SteelMint Stats

 

 
Met Coke Offers to India

Met Coke Offers Likely to Fall on Lower Coking Coal Prices, Subsiding Demand

Signs of an imminent fall in Met Coke prices in the key international region are appearing. The likely decline in the Met Coke prices is expected to be driven by the falling Coking Coal prices, and weathering demand. Demand for Met Coke is decreasing in China as the government of that country is about to implement measures to cut-down steel production, primarily aimed at lowering atmospheric pollution.

Met Coke offers have not yet changed significantly, but are expected to come down in the coming days.

The latest offer for the 64% CSR Met Coke is assessed at around USD 372/MT FoB China, which is lower by around USD 3/MT from the offer in the week last. Likewise, there is also a drop of around USD 3/MT over the week-ago offer in respect to the 62% CSR Met Coke, which is assessed this week at around USD 367/MT FoB China.

For Indian buyers, these offers translate into: USD 389/MT and USD 384/MT respectively on CFR India basis.

There is sufficient demand for Met Coke in India, said a reputed trader, while speaking to CoalMint. And, with the expected decline in the global offers, buying in India is likely to gather sufficient momentum.

The domestic producers in India have not revised their ex-works prices from the week-ago rates.The prevailing ex-works prices for the Blast Furnace grade in India are: INR 22,200/MT (east coast),and INR 27,000/MT and 30,000/MT (west coast).