Monthly Archives: October 2018

Indian Steel Mills May Roll Over Domestic HRC Prices – Sources

This week Indian flat steel market continued to remain bearish over sluggish demand ahead of festive holidays in domestic market. Last week HRC prices have weakened by INR 500-1000/MT W-o-W basis  over weak purchases and liquidity issues.

Thus market sources shared that major Indian steel mills are likely to roll over HRC & CRC prices and may provide discounts and rebates in upcoming month to escalate buying.

However this week domestic HRC prices remain largely stable in traders market. Current trade reference prices for HRC (IS2062) 2.5 mm-8 mm is around INR 46,500/MT (ex-Mumbai), INR 46,800-47,000/MT (ex-Delhi) and INR 47,000- 47,500/MT(ex-Chennai).The prices mentioned above are basic prices excluding GST @ 18% on cash payment basis.

Currently trade reference prices for CRC (IS513) 0.9mm is hovering in the range of INR 52,500/MT (ex-Mumbai),INR 53,000 – 54,500/MT (ex-Delhi) and INR 53,000/MT (ex-Chennai).The prices mentioned above are basic prices excluding GST@18% on cash payment basis.

A trader based in Delhi commented that,”Domestic HRC prices continue to remain steady as the buyers are in festive mood amid weak buying and sluggish demand prevailing in domestic market’.

Thus Indian steel mills will announce the prices for November deliveries within next couple of days.

 

India: HEG Profit Increases 680% in Q2 on Higher Graphite Electrode Prices

Indian graphite electrode maker HEG today reported a net profit of INR 889 crore ($120 Mn) during the quarter ended Sept 30, 2018.

HEG Chairman, Mr. Ravi Jhujhunwala attributes this growth to rising demand from China and ongoing consolidation in the Indian steel industry.

“We continue to experience robust demand for electrodes on the back of strong growth in global EAF steel sector. In addition, the Indian steel industry expanded by 6.1 percent in the first nine months of the year. Moreover, the ongoing consolidation in Indian steel capacity and higher production from under-utilized steel assets is also fueling fresh demand for electrodes.’’

China continues to cut steel production through the traditional blast furnace route in 28 main cities even as it boosts local EAF capacity. Global EAF capacity, ex-China, seen growing 11-12% in 2018. Both fueling demand for graphite electrodes, he further added.

Key Q2 Earnings Highlights (YoY)

· Revenue up 338% to Rs. 1,794 crore as against Rs. 410 crore in Q2FY18

· Q2 EBITDA stood at Rs. 1,389 crores as against Rs.192 crore in the corresponding quarter in the year-ago period

· EBITDA margins stood at 77% as against 47% in Q2FY18

· PAT up by 680% to Rs. 889 crore as against Rs. 114 crore in Q2FY18 and Rs.-8.43 crores in Q1FY18.

 

India: KIOCL Pellet Export Tender Fetches Bid Lower by USD 8

Southern India based pellet maker – KIOCL had floated a tender for pellet export for around 50,000 MT consisting of Fe 64% content and less than 2% alumina. According to sources, the tender received the highest bid at around USD 132/MT, FoB India. However, confirmation of tender getting concluded was not received from company officials till the time of publication of this report.

Towards mid of Oct’18, KIOCL had floated an e-tender for export of 50,000 MT pellets (Fe 65%/64%, less than 2% Alumina). According to market sources report to SteelMint, the highest bid received was at USD 139-140/MT, FoB.

Sentiments in Indian pellet export market continue to remain weak. Amidst uncertainty on sintering and production cuts in the Chinese market, Chinese mills are seen showing preference to fines than pellets.  A sharp hike in iron ore fines prices observes led the spot iron ore fines prices touched 8-month high. This resulted in decline in bids for imported pellets after dull sentiments prevailing amid Golden week holidays. Indian pellet export prices fell by USD 10/MT in last two weeks.

Last week, Indian pellet export market witnessed 4 trades from JSPL, BRPL and Essar Steel. Assessment for Fe 64% pellets with 3% Alumina stood at USD 137/MT, CFR China.

Spot pellet premium fell USD 1.75/DMT W-o-W

Spot pellet premium for Fe 65% grade pellets assessed at USD 72.35/DMT, CFR China this week, down by USD 1.75/DMT W-o-W against USD 74.10/DMT a week before.

KIOCL pellet exports up two folds in Sep’18

KIOCL total pellet exports for the month of Sep’18 witnessed at 0.11 MnT, up almost two folds on monthly basis as compared to Aug’18 exports at 0.06 MnT.

KIOCL accounts for 20% of Indian Pellet Exports in H1 FY’19: KIOCL recorded pellet exports at 0.74 MnT for H1 CY18, contributing 20% of total Indian pellet export share.

 

Indian Secondary Rebar Market Remains Bearish on Subdued Demand

Indian Rebar market observed subdued response amid average demand through the traders and retailers.

It’s been assuming by industrialists that rebar price trend may remain volatile for near term due to liquidity crunch in overall regions and certain steps taken by government officials to control unaccountable sales in specified locations on upcoming elections in few states.

However, few mid size re-rollers are expecting improvement in demand & prices as well post the Diwali festival and piled up stock might get clear with evolving sentiments as price range plunged up to INR 1,500/MT (TMT & Structure) on weekly basis.

During past week, it’s been notified that all steel products will be covered under quality control order as few medium range brands are not up to the level under norms, as per sources.

Further, Central based heavy Structure manufacturer have slightly stretched discount range by INR 200-300/MT to INR 800-1,000/MT over limited trades.

Trade Updates

— North India based Rathi Steels slightly increase their price by INR 100/MT on day basis and current offering at INR 40,450/MT (12 mm), ex-works & excluding GST.

— Central region, Raipur based brand – SPEED TMT unchanged on day basis and current offering at INR 36,700/MT (12 mm) ex-work & excluding GST.

— Gujarat based Shreeyam Power & Steel Industries Ltd branding as National TMT unchanged day basis and current offering rebar at INR 37,800/MT FoR.

— Jalna based Kalika Steels has decreased their prices by INR 500-600/MT on day basis & offering rebars at INR 36,300/MT (12 mm) ex-plant & excluding GST.

— West region based Bhagwati Ferro Metal (P) Ltd offering rebar at INR 37,200/MT for Mumbai (12 mm), ex-work & excluding GST.

— South region – Chennai based ARS Trusteel has unchanged their prices on D-o-D basis & offered rebar at INR 42,100/MT (12 mm), ex-plant & excluding GST.

— East region Based – Shakambhari Ispat & Power Ltd has offered Wire Rod 5.5 mm at INR 40,200/MT & rebars at INR 39,300/MT (12 mm), ex-work & excluding GST.

 

India: Serajuddin’s Iron Ore Production to Enhance with Mining Resumption at Suspended Block

Odisha’s 2nd largest merchant miner- Serajuddin mines is likely to witness an increase in production volumes post resumption of operations at one of its block. The operations were suspended owing to technical issues.

As per the sources, iron ore production is expected to increase by around 5 MnT annually. This will add to supply of iron ore lump which was hampered from the past few months.

Notably, as per data maintained with SteelMint, Serajuddin iron ore production fell to 3.93 MnT during Jan-Sept’18 against 8.93 MnT in the same timeframe previous year.

Serajuddin mines have an EC limit of 15.15 MnT.

Odisha’s based merchant iron ore miners are heard to have further increased discounts over announced offers to stimulate trade activities. According to sources, after the announced successive price hikes, iron ore demand has witnessed offering a continuous discount.

 

Daily Update: Indian Semis Offers Decline

Indian Semi finished steel prices fall marginally over fewer trade inquiries from domestic buyers and as per assessment the price fall is about INR 200-500/MT in Billet & INR 100-200/MT in Sponge iron.

As per participants, lessen spot trades which in turn slight fall in prices on day trade activities. However they believed, Semis prices likely to remain volatile as stability prevails in raw materials.

SteelMint’s latest price assessment for induction furnaces billet in Indian market stood at INR 33,000-36,600/MT (USD 445-494) ex-plant.

Further, the coal based sponge (78-80 FeM) C-DRI price assessment was at INR 21,500-22,900/MT (USD 290-310); prices are ex-plant & excluding GST.

Rupee & BSE Sensex

On 31st October 2018 (Wednesday) INR to USD exchange rate stood at INR 73.92.

BSE Sensex closed at 34,442(+550) on Wednesday, as against last day (Tuesday) at 33,891(-176).

NSE Nifty50 index was closed today at 10,386(+188).

Trade Updates

Odisha Mining Corporation (OMC) – a state-owned miner is to conduct next e-auction for 295,523 MT iron ore fines and CLO on 04th Nov’18. Out of the total quantity, 294,000 MT is fines and remaining 1,523 MT is CLO.

South African RB2 (5500 NAR) coal offers are assessed at USD 72/MT on FoB basis & USD 87/MT CNF India. Prices decline by USD 2/MT on weekly basis.

Central India,Raigarh based mill owners reported, 5-6 hours power cut continues by Jindal for Punjipatra region.

Local manufacturers in Raigarh are offering 60-14 Silico Manganese at around INR 70,000/MT ex-plant.

Vizag Steel’s billet export tender of 10,836 MT billet (IS2830 grade, 90*90mm) to Nepal fetches lower bid at around USD 475/MT (ex-mill). However the tender has not been concluded yet and is still under negotiations – Sources.

Usha Martin has offered Sponge C-DRI (100% lumps, FeM 80) at around INR 22,200/MT ex-plant, Jharkhand. As per officials, inquiries are mostly from North India and local market.

Neo Metaliks in Durgapur has maintained Pig iron prices despite no major trades and reported Steel grade at INR 29,800-30,000/MT ex-plant.

Raipur, Central India based Integrated plants offering Sponge P-DRI at INR 21,300-21,400/MT & Sponge DR CLO grade at INR 23,500-23,700/MT ex-plant

Sources reported, few Raipur based furnace owners are buying FeM 80 C-DRI from Odisha (Jharsuguda) at around INR 22,800-23,000/MT on FoR basis.

Raigarh based Singhal Steel offered P-DRI at INR 20,500/MT & C-DRI at INR 22,000/MT ex-Raigarh, an official reported. Also, the company offers Billet at INR 33,700/MT FoR Raipur.

BMM Ispat, a renowned sponge manufacturer offered FeM 80 P-DRI lumps at INR 20,600-20,800/MT ex-Bellary, Karnataka.

Apple Industries in Bellary (Karnataka) offered Sponge FeM 83+ P-DRI lump at INR 22,000/MT & Billet at INR 34,000/MT ex-plant. Majorly deals concluded for Bangalore & Chennai, an official reported.

South India (Telangana) based Cauvery Iron & Steel offers FeM 80 P-DRI & Billet at INR 21,700/MT & INR 34,000/MT. Also offering 28 MM Rebar at INR 35,500/MT. All prices are ex-plant & excluding GST.

Hyderabad (South India) based Pipe manufacturer Mahalakshmi Profiles Pvt. Ltd (MPL) has kept offers unaltered for ERW Pipe at INR 41,800/MT ex-plant. (basic & excluding GST).

Raipur based wire rod suppliers kept trade discount unaltered and today’s discount at about INR 900-1,000/MT.

As per sources, recent a mid size mill in West India concludes Billet export deal to African countries at close to USD 480/MT FoB, qty approx 10,000 MT.

Reference prices as on 31st October 2018

Particular/Delivery Size, Grade, Origin Prices Min Max Change 1W 1M
Scrap Ex-Alang HMS(80:20) 26,900 26,800 27,000 + 200 27,000 27,000
Ex-Mumbai HMS(80:20) 25,400 25,400 25,600 – 100 25,700 26,300
Ex-Chennai HMS(80:20) 26,800 26,800 27,000   0 26,500 26,500
C-DRI Ex-Durgapur Mix, FeM 78%, +/-1 22,900 22,800 23,000 – 200 23,200 21,800
Ex-Rourkela Mix, FeM 80%, +/-1 22,000 22,000 22,100 – 200 22,200 22,500
Ex-Raipur Mix, FeM 80%, +/-1 22,800 22,700 22,900 – 100 23,000 23,800
Ex-Bellary Lumps, FeM 80%, +/-1 21,500 21,400 21,600 – 100 22,000 23,000
P-DRI Ex-Durgapur Lumps, FeM 78%, +/-1 21,700 21,600 21,800 – 100 21,700 20,500
Ex-Raipur Lumps, FeM 80%, +/-1 21,300 21,200 21,400   0 21,400 22,200
Ex-Bellary Lumps, FeM 80%, +/-1 20,700 20,600 20,800   0 21,300 22,100
Ex-Hyderabad Lumps, FeM 80%, +/-1 21,600 21,500 21,700   0 22,000 23,000
Ingot Ex-Mandi Gobindgarh 3.5 x 4.5 Inch, IS 2830 35,800 35,700 35,900 – 300 36,500 35,500
Ex-Durgapur 3.5 x 4.5 Inch, IS 2830 33,900 33,800 34,000   0 34,100 33,200
Ex-Rourkela 3.5 x 4.5 Inch, IS 2830 32,600 32,500 32,700 – 200 33,000 32,100
Ex-Raipur 3.5 x 4.5 Inch, IS 2830 32,750 32,700 32,800 – 150 33,300 32,600
Ex-Mumbai 3.5 x 4.5 Inch, IS 2830 33,200 33,100 33,300   0 33,700 34,300
Ex-Chennai 3.5 x 4.5 Inch, IS 2830 34,700 34,700 34,900 – 100 35,000 36,300
Ex-Hyderabad 3.5 x 4.5 Inch, IS 2830 33,700 33,600 33,800 – 500 34,200 35,300
Billet Ex-Mandi Gobindgarh 125×125 mm, IS 2831 36,600 36,500 36,700 – 300 37,300 36,300
Ex-Durgapur 125×125 mm, IS 2831 34,100 34,000 34,200 – 100 34,600 33,800
Ex-Rourkela 125×125 mm, IS 2831 33,000 32,900 33,100 – 300 33,600 33,100
Ex-Raipur 125×125 mm, IS 2831 33,700 33,600 33,800 – 200 34,100 33,500
Ex-Ahmedabad 125×125 mm, IS 2831 34,200 34,100 34,300 – 100 34,450 34,700
Ex-Mumbai 125×125 mm, IS 2831 33,400 33,300 33,500   0 33,900 34,500
Ex-Chennai 125×125 mm, IS 2831 35,200 35,200 35,400 – 100 35,500 36,800
Ex-Hyderabad 125×125 mm, IS 2831 34,000 33,900 34,100 – 500 34,500 35,500
TMT Ex-Delhi/NCR 12-25 MM, IS 1786- 500 Fe 39,200 39,000 39,400 – 200 40,100 38,800
Ex-Durgapur 12-25 MM, IS 1786- 500 Fe 39,300 39,100 39,500   0 39,500 38,800
Ex-Raipur 12-25 MM, IS 1786- 500 Fe 36,600 36,400 36,700   0 37,400 37,500
Ex-Mumbai 12-25 MM, IS 1786- 500 Fe 36,900 36,700 37,200 – 100 37,700 39,200
Ex-Chennai 12-25 MM, IS 1786- 500 Fe 40,000 39,800 40,200 – 200 40,600 42,200
Ex-Hyderabad 12-25 MM, IS 1786- 500 Fe 38,000 37,800 38,200 – 500 38,500 39,000

Basic prices in INR/MT & excluding of GST @ 18%
Source: SteelMint Research

 

Iran Likely to Boost Trade Relations with Oman; May Boost Steel Exports

Iran one of the largest steel exporter in MENA is currently facing sanctions from US, owing to which the nation has witnessed a sizable amount of downfall in exports during last few months. Many of the trade allies of Iran has suspended their business with Iran, upon that, the secondary sanctions on Iran is likely to impose on 04 Nov’18, which will further bring down the export as it will affect banking, insurance and shipping industry.

Many Iranian industry experts are working on the possible solution to counter sanctions and to do the business. Recently, the sixth meeting of the Committee of Iran-Oman Strategic Consultations was held at the Iranian Foreign Ministry.

Mr. Mohammad Farazmand, an assistant to Iran’s foreign minister and the director general for Persian Gulf affairs at the Iranian Foreign Ministry and Mr. Sadeq al-Hessan, the deputy Omani foreign minister for political affairs met with each other and discussed about the future of bilateral trade among the nations.

In the meeting, the delegates from both the nation discussed key issues pertaining to bilateral relations as well as the latest regional developments. The Iranian and Omani diplomats highlighted the need to further enhance and develop mutual cooperation on different fronts as well as the need for authorities of both countries to continue their consultations. They also agreed on solutions to upgrade and expand reciprocal ties.

Iran and Oman Seek to Boost Bilateral Trade to USD 1 Bn.

Mr. Mohsen Zarrabi, Head of Iran-Oman Chamber of Commerce said that the trade between the two countries are expected to reach USD 1 billion by the end of this year. Iran and Oman has good economic relations in recent years due to extended bank cooperation between the two countries.

It is to be noted that Iran is one of the largest semi-finished steel exporter to Oman, the nation has exported around 0.75 MnT of semi-finished steel to Oman in CY’17. During the current CY’18(Jan-Sep), Iran has already exported 0.76 MnT to Oman.

Iran is also one of the key exporter of finished flat steel to Oman, the nation has exported around 0.05 MnT steel to Oman in CY’17. During the current CY’18 (Jan- Sep), Iran has exported around 0.11 MnT steel to Oman.

Inputs taken from Iran Daily

 

Australian Coking Coal Spot Price Levels Drop Amid Ambiguity of China’s Winter Cuts

Australian premium hard coking coal prices have been inching down gradually over the past few days, after having peaked at $223/mt FOB Australia ($239.55/mt CNF India) in the middle of this month (on 17 Oct’18).

However, hard coking coal prices have picked up by nearly about $10/mt during the same period due to supply tightness in the second-tier market.

Presently, Chinese buyers are said to be awaiting clarity on the potential for stricter winter production cuts in China.

Implementation of the winter production cuts have not started yet and most steels mills are still running at full capacity.

Stringent port restrictions in Southern and Northern China are expected to be enforced until the end of the year, as more quotas will be allocated to thermal coal cargoes in the winter.

CNF China prices may be supported to some extent in the near term as there could be restocking demand by Chinese end-users as winter approaches.

PRICE ASSESSMENTS

The latest price for the Premium HCC grade is assessed at around USD 218.25/MT FOB Australia, lower by about USD 0.70/MT than the average price of around USD 218.95/MT in the week gone by (22-26 Oct’18).

Latest import offers for the 64 Mid Vol HCC grade are assessed at around USD 193.75/MT FOB Australia, higher by about USD 3.21/MT than the average price of around USD 190.54/MT in the last week.

Source: CoalMint Research

For Indian buyers, the above offers amount to USD 233.15/MT and USD 208.65/MT respectively on CNF India basis.

 

Bangladesh: Imported Scrap Prices Remain Firm in Recent Trades

SteelMint learned in conversation with industry participants that imported scrap market in Bangladesh has observed limited trade activities with only few major steel mills active in the market. 

Limited offers for containerized Shredded 211 of USA/Canada origin heard at around USD 375/MT, CFR stable against last week’s assessment.

Few buyers were looking for P&S scrap with buying interest in the range of USD 375-378/MT, CFR. 

In recent trades heard, HMS 1 scrap was traded in the range of USD 361/MT, CFR Chittagong from leading supplier like South Africa.

“All small buyers are very silent at the moment. No buying interest at the moment from small buyers, only few major mills are active at the moment “, shared a Bangladesh based scrap trader.

Indian sponge iron export deals to Bangladesh reported at around USD 360/MT, CFR Chittagong. Prices have remained firm against last week.

Bangladesh local scrap prices move down – Local scrap prices heard at around BDT 34,000/MT which was last week assessed at around BDT 34,500-35,000/MT. Prices are inclusive of taxes.

Ship breaking market in Bangladesh remains positive – Ship cutting prices moved up by USD 5-10/MT pushing the assessment at USD 445/LDT for general dry bulk cargo, at USD 455/LDT for tanker cargo and at USD 465/LDT for containers on CNF Bangladesh basis. Prices have remained firm on weekly basis with few trades in bulk and tanker being reported.

 

India: Ferro Silicon Prices Slip in Bearish Market

Indian Ferro Silicon prices witnessed a slight downward correction due to weak demand.

“Ferro Silicon prices drifted as bearish sentiment is creeping into the market on account of inactivity, exerting pressure on sellers to curtail prices,” said a source referring to the current market trend.

SteelMint learned that some of the producers are low on stock as they are already booked. However, others mentioned that concluding deals in the spot market is getting difficult due to weak demand.

The current price of Ferro Silicon grade 70-75% is assessed at around INR 92,000/MT (Ex-Bhutan) and INR 93,000-94,000/MT (Ex-Guwahati).

“Declining Ferro Silicon prices in China has been a matter of deep concern for the Indian producers,” said a source referring to the concern of the domestic producers as they expect a downward correction in price.

A producer source mentioned that demand from Europe has been very low as they have already made their purchase prior to the festivals. The export offers are assessed to be unchanged at USD 1,375/MT FOB Kolkata, while no trades have been concluded at spot market.

On the future outlook, market participants expect the prices to correct downwards while hoping the demand to rebound.