Monthly Archives: June 2019

Odisha’s Essel Mining Cuts Iron Ore Lump Prices – Sources

Essel Mining – a major iron ore mine in Odisha has reduced its offers for iron ore lumps by INR 200/MT (USD 3/MT). Revised prices will come into effect from tomorrow i.e 01 Jul’19. However revision in fines price could not be confirmed at the time of publishing this report. Company officials were not available to confirm the price revision at the time of publishing the news article.

According to sources, after the price reduced, its Jilling mines for 65% Fe calibrated iron ore lumps (5-18mm) stands at Rs 5,425/MT (USD 79/MT ) and 10-30mm stands at INR 5,025/MT (USD 73/MT) including royalty and taxes on FoR basis.

Odisha merchant miners kept iron ore offers unchanged in June. SteelMint’s reference price assessment for Odisha stands at INR 4,000-4,100/MT (ex-mines) for 5-18mm and INR 1,900-2,100/MT for fines Fe 63%.

India’s domestic sponge and billet prices plunged amid weak market fundamentals. SteelMint’s assessment of C-DRI in Durgapur stands at INR 18,200/t (delivered) against INR 19,700/MT a month back. Following this sponge makers have slightly lowered iron ore lump purchases in last 1-2 weeks.

Essel Mining production increased sharply in the last fiscal year

Essel Mining has shown very promising growth and depicted a sharp increase in iron ore production to at 8.64 MnT in FY’19, up more than 2 times as compared to 3.7 MnT in FY’18. The miner resumed operations at its Jilling Langalota mines after it received permission from Supreme Court in Feb’18. The company owns mines in Odisha.

 

JSW Steel receives Lenders Approval to acquire Asian Colour Coated Ispat

India’s steel giant, JSW Steel has moved a step closer to acquire debt-ridden Asian Colour Coated Ispat Ltd (ACCIL) that was referred to the insolvency court by RBI in July last year. As per the latest updates, the company’s bid has received approval from 80% of the lenders, the voting for which was done on Friday.

Asian Colour Coated Ispat specialises in downstream, galvanised and colour coated products. It has manufacturing facilities close to Delhi and Mumbai, and exports its products to Europe, Latin America, and Africa. It has an annual capacity of 1 MnT.

JSW Steel has offered to pay INR 1,525 crore to the lenders of the asset, which makes up for a little more than 30% of the total dues of INR 5,000 crore that the asset owes to banks. Operational creditors that owed a total of INR 507 crore will be getting INR 25 crore from JSW Steel. SBI, Bank of Baroda and IDBI Bank are the main lenders to Asian Colour Coated.
JSW Steel will be issued a letter of intent and the resolution plan will be placed before the National Company Law Tribunal (NCLT) for the final approval.

In May’9, JSW Steel which was the sole bidder for the company had revised its bid for Asian Colour Coated Ispat Ltd from INR 1,200 crore to INR 1,500 crore in order to acquire the debt-ridden company in an insolvency driven process after the lenders convinced the company to offer a better deal. In its first bid, JSW Steel had offered INR 1,200 crore including INR 800 crore for secured financial creditors and INR 400 crore for operational creditors.

Acquisition of Asian Colour Coated Ispat will be the third successful acquisition through the insolvency driven process. The asset will be a good fit for JSW Steel that is almost tripling its colour coated steel capacity to 2 MnT per annum over a year and a half as part of its strategy to augment capacities of value added steel products that are seeing a growth in demand and also earn the manufacturers higher margins.

It had earlier acquired Monnet Ispat for INR 2,875 crore in a joint venture with Aion Capital. Though JSW Steel’s bid of INR 19,300 crore to acquire Bhushan Power and Steel was approved by the lenders last October, the final approval is delayed due to cases filed by the promoters of Bhushan Power.

 

India: Chrome Ore Production fell by 18% in May’19

Odisha contributes almost entirely towards chrome ore production in India. Chrome Ore Production in May’19 was noted to be 380,909 MT. It is lower than the previous month’s production viz., Apr’19 by 18%.

Production level by Captive miners fell by 13% as compared to the previous month in May’19. Balasore Alloys contributed the highest amount in the production of Chrome Ore, amongst the Captive mines in India. However, the production was lower as compared to the previous month in May’19 by 21%. Meanwhile Infrastructure Development Company Limited (IDCOL) increased their production by significant levels. However, Ferro Alloys Corporation Limited (FACOR) increased their production levels by marginal level in May’19 M-o-M.

Production levels by Merchant miners were lowered down from 420,340 MT in Apr’19 to 340,572 MT in May’19 which accounted for 19% downtrend. Misrilall Mines and TATA Steel in together contributed to approximately 64% of the total Chrome Ore Production by India in May’19. Production for TATA Steel stood at 172,471MT which was inched up by 13%. Misrilall Mines decreased its production levels significantly by 55% to 71,320 MT.

Misrilall Mines and TATA Steel, however, remained the largest miners in May’19. Odisha Mining Corporation (OMC) remained the third largest merchant Miner with 50,210MT production in May’19. Meanwhile, production cuts in IMFA and OMC were observed by 13% each. However, production levels of B.C. Mohanty & Sons were stable in May’19.

Total Production by Captive miners remained at 40,337MT in May’19 and for Merchant miners are at 340,572MT.

Odisha Chrome Ore Production in May’19 & April’19
Mines Name May’19 April’19
Captive
Balasore Alloys 22,690 28,550
FACOR 16,758 17,282
IDCOL 889 747
Sub Total (A) 40,337 46,579
Other Than Captive
TATA Steel 172,471 152,191
Misrilall Mines 71,320 158,635
O.M.C. 50,210 57,576
IMFA 36,633 42,211
B.C. Mohanty & Sons 9,939 9,726
Sub Total (B) 340,572 420,340
Grand Total 380,909 466,918

Source: Odisha Govt.
All Quantity in MT

 

Global Ferrous Scrap Market Overview – Week 26, 2019

Global ferrous scrap prices observed mix trend this week. Turkey has observed rebound by USD 12-13/MT in recent deals, following which global offers from US and European markets likely to revive reflecting in an increase in imported scrap prices in South Aisa and East Asia in upcoming days. On the other hand, still weak US West coast offers and Cheaper Japanese scrap prices likely to limit the sharp rise further. Tight supply and improving profit margins have resulted in a jump in domestic scrap purchase prices in China.

Turkey – Imported scrap prices rebound sharply by USD 12-13/MT against last week in Turkey, as steel mills have returned into the market with August shipments. This brings positivity in the global scrap market.

After remaining silent early week a UK cargo booked towards the closing of the week, comprising 22,000 MT of HMS 1&2 (80:20) at USD 293/MT, 15,000 MT Shredded at USD 298/MT and 5,000 MT of Bonus at USD 303/MT, CFR Turkey. While the Marmara based steelmaker booked 26,000 MT HMS 80:20 at USD 294/MT and 4,000 Bonus at USD 299/MT, CFR.

SteelMint’s assessment of US origin HMS 1&2 (80:20) scrap stands at USD 293-294/MT, CFR Turkey, up by USD 12-13/MT on the week. while assessment of European origin HMS stands at USD 288-289/MT, CFR Turkey.

Japan – For the 3rd successive week, Japan’s Tokyo steel lowered the domestic H2 scrap purchase twice, as the company has now observed 7 price cuts in Jun’19. After the recent price lowering, the company is paying JPY 26,500/MT (USD 261) for H2 scrap delivered at Tahara plant in central Japan and for Utsunomiya plant in Kanto region, while JPY 26,000/MT (USD 252) for Okayama plant. Low production by EAF steelmakers and weak demand from overseas importers of Japanese scrap is expected to keep sentiments

China – Chinese EAF steelmaker Shagang Jiangsu Steel announced a price hike for purchase of domestic steel scrap (all grades) by RMB 70-100/MT (USD 10-15) effective from 29th Jun’19, as tightness in supply of domestic scrap persists amid seasonal concerns while imported iron ore prices continue to remain high.  With the said price hike, Shagang Steel will pay RMB 2,700-2,730/MT (USD 393-398) inclusive of 13% VAT for HMS (6-10 mm thickness) delivered to headquarter works in Zhangjiagang north of Shanghai in China, against the last report’s price of RMB 2,630/MT.

South Korea – Hyundai Steel did not bid for Japanese scrap this week. In the latest booking reported, the company heard to have booked 50,000 MT of H2 from Japan. H2 bid was at JPY 28,000/MT, FoB last week. The domestic scrap prices witnessed downtrend on account of oversupply in the market. It was heard that Hyundai Steel will be repairing its EAF furnace from 21th June for 2 weeks and prices might inch up, however, confirmation was awaited. South Korean importers heard to be negotiating for US Bulk HMS 1&2 at around USD 295-300/MT, CFR South Korea.

Taiwan – Imported scrap prices had seemed to drop another USD 5-10/MT to USD 270/MT, CFR Taiwan for US origin HMS 1&2 80:20. Leading steelmaker Feng Hsin has lowered its domestic scrap buying prices twice observing a total drop of TWD 400/MT to TWD 8,700/MT for HMS 80:20 delivered to plant. Seasonal rains continue to hamper domestic demand for long steel products, seeing rebar prices to all year low so far.

Vietnam – Offers for bulk shipments from Japan and Hong Kong reported a successive drop. The price for HMS 1&2 (50:50) from Hong Kong is around USD 295/MT, CFR. Japanese export prices fell further as HS and Shindachi price in bulk to Vietnam is heard USD 330/MT and H2 price around USD 285-290/MT, CFR Vietnam.

Indonesia – Indonesian buyers were not very active this week. Prices assessed almost stable for Busheling around USD 338-340/MT; P&S at USD 325-330/MT, and Shredded scrap at around USD 300-305/MT,CFR Jakarta. Along with the improvement of steel price in China, it is being believed that the market is in the bottom and it should rebound soon.

India – Indian imported scrap market remained almost quiet with very limited trades reported this week. however, concerns on US-China meet, lack of clarity on budget, weakened domestic steel prices and the arrival of monsoon kept sentiments non-viable for scrap imports.

SteelMint’s assessment for containerized Shredded from Europe, UK and US slightly improve to USD 315-318/MT, CFR Nhava Sheva. However, no major deal reported in the market. Few trades for low priced scrap were reported in the opening of the week.

UK origin Turning scrap sold at USD 265-270/MT, CFR and HMS offer stood in the range of USD 300/MT, CFR. South African HMS 1&2 was reported at around USD 315/MT, CFR. On improved domestic demand Dubai based scrap sellers remain mostly away from offering much with HMS 1&2 assessment at around USD 310/MT, CFR. West Africa HMS is at around USD 290-295/MT, CFR.

Pakistan – Pakistan’s currency hit a record high of 163 against USD this week. Offers for imported scrap inched up following the global trend. Suppliers remained watchful for the price trend keeping inventories mostly deficient and restocking can be expected in the coming weeks.

Assessment for containerized Shredded 211 scrap from US and UK now stands at USD 315-317/MT recovering by around USD 5/MT, while few deals at USD 312-315/MT levels were reported earlier in the week. Dubai origin HMS 1 offers assessed at USD 320/MT, CFR while HMS 1 of UK origin at USD 310/MT, CFR Qasim.

Finished steel prices are likely to jump further on 17% FED’s implementation from next week. Domestic steel prices are expected to jump sharply following recent currency depreciation by 4-5% keeping domestic situation uncertain.

Bangladesh – Imported scrap offers continued to decline as offers softened further. New tax tariffs announced on raw materials concerned the steelmakers as finished steel prices likely to increase significantly with the implementation of VAT.

Assessment for containerized Shredded scrap from North America & Europe stands at USD 325-330/MT, CFR Chittagong, slightly down against last week. Offers for South American HMS in containers currently reported in the range of USD 315-318/MT, CFR Chittagong while lower grade European HMS 1&2 at USD 310-313/MT, CFR. P&S offers reported at USD 330-335/MT amid very few offers available while local scrap was assessed at BDT 34,000-34,500/MT,ex-Chittagong.

 

Eastern India Mills Eye Export Market over Limited Domestic Inquiries

As per trade sources report, limited inquiries from domestic buyers has resulted most of manufacturers in Durgapur (eastern India) to explore export opportunities. Mills are giving priority to export deals to clear inventories.

SteelMint learned that wire rod export deals to Nepal were made at INR 500/MT (USD 7) less than the prevailing offers for domestic buyers.

As per couple of regular exporters, more than 1,000 MT wire rod have been sold to Nepal yesterday, at an average price of USD 470-475/MT which is equivalent to INR 32,400-32,700/MT (ex-mill). However in domestic market small deals were reported at close to INR 33,000-33,200/MT (ex-mill).

Nepal is the largest buyer of Indian wire rod with a contribution of 85-90% of total wire rod exports from India. On an average, India’s monthly Wire rod exports to Nepal is around 20,000-25,000 MT.

Meanwhile, few parcels of Induction grade billet were concluded to Nepal yesterday at near to USD 400-405/MT ex-mill, equivalent to USD 430/MT CFR Raxaul border, Nepal.

The sources in Durgapur shared that, in current circumstances inventories have nearly doubled in Billet & Wire rod stock is more than 2 folds. Hence the mills are eyeing for bulk deals whether it is on suitable price range or on slightly lower range to improve lifting and clear inventories as well.

The inventories have been piled up on the back of significant drop in prices since more than a month, thus buyers opt to wait & watch till their is clarity on market trends.

Further, the participants believe as the price are on recovery mode, deals for domestic as well exports to further find support, which may reduce selling pressure among stockiest & mills end.

Today the domestic Billet & Wire rod offers in Durgapur marginally surge by INR 200/MT and stood at INR 28,600-28,800/MT for Billet (100*100 mm) & INR 33,200-33,400/MT for Wire rod (5.5 mm); ex-mill & excluding 18% GST.

 

Chinese Steel Market Highlights- Week 26, 2019

This week Chinese steel market showed uptrend in steel prices post announcement of production cuts in Tanghshan region by 20-50% on blast furnaces in order to curb air pollution and control excess capacities produced by steelmakers in China.

According to the notification issued, steelmakers that are categorized as Grade A or located along the coast are required to cut capacity of sintering and pelletising machines, blast furnaces, converters, and lime kilns by 20%, while other mills in the region will face cuts of at least 50% until 1st Aug’19.

Nation’s HRC and rebar export offers witnessed uptrend over gains in domestic market. Iron ore prices also picked up towards the weekend. Billet domestic offers reported surge. However coking coal offers reported fall over weak demand from overseas buyers.

Meanwhile China’s Shagang Steel to raise scrap purchase price by RMB 70-100 (USD10-15) amid tight supply.

Chinese spot iron ore prices moved up towards weekend- Chinese spot iron ore prices opened up this week at USD 116.30/MT, fell during the week to around to USD 113.75/MT, CFR China,as on 25th June’19 and later picked up to USD 117.95/MT towards weekend.

The global iron ore prices have depicted fall during mid week amid easing supply from Vale and decreasing demand from Chinese mills. Meanwhile Tangshan govt’s announcement for reducing production till 1 Aug’19 adhering to pollution norms; it is expected that steel mills will have higher iron ore inventories following which global iron ore miners turned active to offload cargoes. However, later towards weekend prices moved up.

As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports dropped to 115.25 MnT this week as compared to 116.75 MnT a week ago.

Spot lump premium drop week-on-week- Spot lump premium dropped down to 0.3400/DMTU, as against USD 0.3601/DMTU.

Spot pellet premium moves down amid thin margins- Spot pellet premium for Fe 65% grade pellets assessed at USD 23.25/MT as against USD 23.95/MT CFR China a week ago.

Pellet inventory at major Chinese ports fell for the week to 5.05 MnT as compared to 5.25 MnT towards end of last week. Preference for pellet and lump is expected to increase amid imposition of sintering control in Tangshan.

Coking coal offers witness continual decline over bearish outlook- Seaborne premium low-volatile hard coking coal prices remained under pressure amid seasonally weak demand.

However tight supply of hard coking coal will offset the further fall in prices from Australia. Meanwhile demand from Indian buyers also remained subdued amid approaching monsoon season.

Latest offers for the Premium HCC grade are assessed at around USD 195.00/MT FOB Australia as compared to USD 197/MT in previous week.

China’s domestic billet prices shoot up amid announced production cuts in Tangshan- This week Chinese domestic billet prices settled at RMB 3,620/MT, surged RMB 160 against last week.

According to SteelMint assessment, the prime reason for such a towering rise is 20-50% steel & sintering production cut in Tangshan until 1st Aug targeted to curb air pollution. Also, this week’s capacity utilization rate is reported to slow down by 2.39% in Tangshan against last week. Another reason for this high rise in billet prices is expected calm in US-China trade war.

Chinese HRC export offers surge over gains in domestic market- Chinese HRC exports offers started to gain upward momentum over bullish market sentiments both in export and overseas market.

Currently nation’s HRC export offer surged by USD 15-20/MT W-o-W basis and stands at USD 500-505/MT FoB basis against USD 480-490/MT FoB basis in preceding week.

On weekly basis domestic HRC prices in China stood at RMB 3,920-3,940/MT in eastern China (Shanghai) this week; upsurged by RMB 140/MT which was RMB 3,780-3,800/MT in eastern China (Shanghai) in previous week.

Nation’s steel prices boosted as Chinese govt announced production cuts in Tanghshan region by 20-50% on blast furnaces. This notice on suspension and limit of production of steel enterprises was circulated in order to control emission and curb air pollution.

Post announcement steel futures remain strong which resulted to gains in domestic market following upside in export offers to overseas buyers.

Thus exporters are planning to replenish inventories in anticipation of further upturn in steel prices from China.

Chinese rebar export offers move up amid strong futures- Chinese rebar exports offers rose amid gains in futures market on the back of announced reduction in output. This resulted to strengthening domestic prices and in turn led to uptrend in export offers from China.

Currently nation’s rebar export offers registered at USD 507-512/MT FoB China moved up USD 12-15/MT against previous week.Last week the offers were at USD 495-500/MT FoB basis.

Meanwhile domestic rebar prices stood at RMB 3,960-4,000/MT (Eastern China) spiked by RMB 130/MT W-o-W basis which was RMB 3,830-3,870/MT (Eastern China).

However competitive offers from other exporting nations lead to thin trades of rebar in export market.

Also inventory levels of rebar continued to remain on higher side amid slowdown in construction activities. However recent production cuts may ease inventories and boost rebar prices in domestic market.

Chinese Steel Market Highlights – Week 26, 2019

        Particulars

Currency Current
Price per MT
1 W

1 M

Spot Iron Ore
Fines Fe 62%,CNF China
USD 118 116 100
Met Coke, 64%,
FoB China
USD 317 326 336
Premium HCC,
CNF China
USD 199 204 212
Billet,FoB China USD 475 465 473
Domestic billet prices RMB 3,620 3,460
Domestic Rebar Prices
(ex-warehouse
Eastern China)
RMB 3,960-
4,000
3,830-
3,870
Rebar, FoB China USD 507-512 502 520
Wire Rod.FoB China USD 515-525 510 520
Domestic HRC Prices
(ex-warehouse)
Eastern China
RMB 3,920-
3,950
3,780-
3,800
HRC, FoB China USD 500-505 485 508
CRC,FoB China USD 530-535 533 543
Plate,FoB China USD 505-515 500 525

Source: SteelMint Research

 
Japan Coal Imports

Japan: Coal Imports Down 6% M-o-M in May’19

Japanese coal imports have fallen to its lowest monthly total for CY19 during May.

Data provided by custom indicate that the country’s coal import had decreased 6% M-o-M to 14.58 MnT in May’19 compared with 15.55 MnT in Apr’19, which was also 10% lower on the year from 16.29 MnT in May’18.

Japanese coal intake had been affected by an overall drop in coal-fired power output, supplemented by increases in both nuclear and gas-fired power generation.

During the first 5 months of CY19 (Jan’19-May’19), Japanese imports have totaled 77.92 MnT, down 3% Y-o-Y from 80.52 MnT noted in same period last year.

Grade-wise Coal Imports:

Japanese import of non-coking coal continued its declining trend by posting a monthly total of 9.34 MnT in May’19. Apparently, non-coking coal intake had fell to its lowest total in the past 2 years during the month.

Japan’s coking coal imports also dropped in May’19 as shipments from Australia and Canada fell sharply. Coking coal volumes taken during the month decreased 15% to 3.39 MnT as against 4.01 MnT in Apr’19.

However, imports of Anthracite, Pet Coke and Met Coke had increased m-o-m during May’19.

Grades May’19 Apr’19 % Change
Non Coking Coal 9.34 9.96 -6%
Coking Coal 3.39 4.01 -15%
Anthracite 0.62 0.5 24%
Pet Coke 0.55 0.39 41%
Met Coke 0.11 0.08 38%
Others 0.58 0.61 -5%
Grand Total 14.58 15.55 -6%

Source: Japanese customs
Quantity in MnT

Major Coal Exporters:

Coal purchasing pattern of Japan has shifted during CY19, with buyers increasingly diversifying their sources of coal supply.

Consequently, Japanese intake from its major coal exporter-Australia has fallen 7% Y-o-Y to 45.24 MnT during the first 5 months of CY19.

Australian export in May’19 had dropped 13% M-o-M to 7.81 MnT, which was also 18% lower on the year from 9.48 MnT in May’18. Apparently, monthly coal volumes had fell below the 8-MnT mark for the first time since May’15.

Exports from Japan’s second-largest coal supplier-Indonesia, grew 4% on the month to 1.94 MnT in May’19.

US emerged as the third-largest coal supplier during May’19, with exports rising 118% M-o-M to 1.86 MnT.

Supplies from Russia had come down slightly on the month, marked at 1.7 MnT in May’19 as against 1.71 MnT in Apr’19. While, Canada and China had posted a hefty fall in coal supplies to Japan during the month.

Japan Country-wise Coal Imports

 

Indian Steel Market Weekly Snapshot

Indian steel prices remained volatile during the week 26 (22nd to 29th Jun) as domestic trades were not up to the mark for Semis & Finished products amid rising inventories with the mid sized mills, as reported by industry participants.

As per assessment, this week prices of Semis products volatile by INR 100-500/MT. However Finished Long & Flat steel prices dropped by INR 500-1,000/MT (USD 7-14) across regions on account of limited inquiries, which in turn piled up stock.

IRON ORE & PELLETS

NMDC Ltd- India’s biggest iron ore producer has announced a roll over in its iron ore prices for July deliveries yesterday. Odisha merchant miners also kept iron ore prices unchanged for this week.

Majority of central & eastern India based pellet makers are eyeing export markets amid high realisation. Durgapur (eastern India) based pellet makers have raised offers following hike in export offers. SteelMint’s reference pellet price assessment stands at INR 6,500/MT (delivered) up by INR 200-300/MT against INR 6,200-6,300/MT last week. Central India (Ex-Raipur) offers at INR 6, 800/MT. Preference to iron ore lump has softened demand for pellets.

India’s KIOCL signs MoU with Glencore & Steel Mont for pellet supply of around 400,000 MT to European markets including UK.

KIOCL concludes 50,000 MT domestic Iron ore concentrate (Fe 63.5%) purchase tender at around INR 6,050/MT CFR Mangalore port. The due date was on 14th June’19.

Central India based pellet maker concludes 50,000 MT export deal to China USD 130/MT CFR. Another deal reported by east India based pellet maker for standard grade pellets at USD 133-134/MT, CFR China.

As per WSA (World Steel Association) India’s crude steel output moved up by 5% to 9.19 MnT in May’19 against 8.78 MnT in the preceding month.

COAL

Australian coking coal export prices have slide further amid weakening global demand in response to the bearish outlook in major steel-producing countries.

In China, seaborne coking coal of high coke strength after reaction, low ash and sulphur properties have been a price competitive option, relative to domestic coking coal of similar specifications, but end-users continue to adopt a cautionary stance towards procurement.

In Australia, the spot supply of hard coking coal is tighter compared to premium low-volatile cargoes. This shortage should ease the fall in prices of hard coking coal with low ash and sulphur.

In the Indian market, trading activities remained thin without any immediate spot demand due to the timely onset of monsoon season. Latest offers for the Premium HCC grade are assessed at around USD 195.00/MT FOB Australia and USD 207.60/MT CNF India.

MMTC, India’s largest and state-owned trading house, issued a tender for the sale of 15,000 MT coking coal. The due date for submitting the bids is 02 July’19.

SCRAP

Indian imported scrap market remained almost quiet with very limited trades reported this week. The market is expecting for a recovery next week with the recent rebound in Turkey prices although prices stand range-bound after hitting the bottom. Concerns on US-China meet, lack of clarity on budget, weakened domestic steel prices and the arrival of monsoon kept sentiments non-viable for scrap imports.

SteelMint’s assessment for containerised Shredded from Europe, UK and US slightly improve to USD 315-318/MT, CFR Nhava Sheva. However, no major deal reported in the market.

Few trades for low priced scrap were reported in the opening of the week. UK origin Turning scrap sold at USD 265-270/MT, CFR and HMS offers stood in the range of USD 300/MT, CFR. South African HMS 1&2 was reported at around USD 315/MT, CFR. On improved domestic demand Dubai based scrap sellers remain mostly away from offering much with HMS 1&2 assessment at around USD 310/MT, CFR. West Africa HMS at around USD 290-295/MT, CFR.

SEMI FINISHED

Indian Semi finished steel market observed volatility in prices due to fluctuating demand and during the week Sponge iron offers surged in Central & Eastern regions by INR 300-500/MT (USD 4-7), however downfall seen in Southern India by INR 500/MT.

In line domestic billet market also marked mix trend, where prices volatile by INR 100-500/MT, W-o-W.

Indian steel export offers to Nepal dropped, however trade volumes improved as per participants and deals reported for Billet (induction grade, 100*100 mm) at USD 400-405/MT & for Wire rod (commercial grade, 5.5 mm) at USD 470-475/MT ex-mill, Durgapur. Freight cost to Nepal is about USD 25-30/MT.

Indian Sponge iron export offers drop further and latest assessment stood at around USD 280/MT CPT Benapole(dry port of India & Bangladesh), equivalent to USD 295/MT CNF Chittagong, Bangladesh.

RINL has invited a tender for export of 30,000 MT Billets and 20,000 MT Bloom. The due date for bid submission is 2nd Jul’19. The company also floated export tender for Nepal of 10,836 MT Billets and 5,418 MT Wire Rod, which due date for bid submission is 2nd Jul’19.

SAIL has invited an ocean export tender for 16,200 MT Prime Mild Steel Non-Alloy Concast billets (150*150 mm) from Durgapur Steel plant. The last date for bid submission is 28 Jun’19.

Rashtriya Ispat Nigam Limited (RINL)- state-owned steel maker under the Ministry of Steel, has invited a tender for export to Nepal . The due date for bid submission is 02 Jul’19 till 15:00 hrs

TATA Metaliks Limited (TML) – known as the largest foundry grade pig iron manufacturer in eastern India has reduced foundry pig iron prices by INR 800/MT (USD 12) to INR 31,700/MT (USD 457), ex-plant, Kharagpur, eastern India.

Jindal Steel has further cuts price and reported steel grade pig iron at INR 26,500-26,700/MT ex-Raigarh & panther shots (granulated pig iron) at INR 24,500-24,700/MT ex-Angul, Odisha.

SAIL’s Rourkela Steel Plant tender held on 24th Jun’19 to sell about 3,800 MT steel grade pig iron has received weak response. The base price for the tender was quoted by RSP at INR 27,250/MT and near about 85% material unsold. Further the plant has schedule an auction to sale 3,400 MT basic grade Pig iron whose due date is 29th Jun’19.

FINISH LONG

Indian Finish Long steel market have been observed limited demand amid dull sentiments across regions, hence price range down by INR 500-1,000/MT, in which major fall of around INR 1,000/MT registered in Jalna (Maharashtra) due to mounting stock with the mid scale mills.

Moreover participants believe that, Indian finish long steel prices to range bound till the National budget declaration which is scheduled on 5th Jul’19. Although inventories being stated slightly high in comparison to average levels particularly in Western and Central India.

Current trade reference rebar prices (12-25 mm) assessed at INR 32,500-32,700/MT Ex- Raipur & INR 33,400-33,700/MT Ex-Jalna; prices are basic & excluding 18% GST.

Further this week, State owned large mills have maintained finish long steel prices and current trade reference rebar (12 mm) price registered at INR 39,500-40,000/MT Ex-Chennai (Stock Yard) and Structure (Channel 125) registered at INR 40,400/MT Ex-Mumbai (Stock Yard).

Central region, Raipur based heavy structure manufacturers have slightly raised trade discount by INR 100-200/MT to INR 800-1,000/MT against last week and trade reference prices stood at INR 36,900-37,300/MT (200 Angle) ex-work.

Trade discounts in Raipur Wire rod firm this week at INR 1,000-1,200/MT. The fresh trade reference prices hovering at INR 33,000-33,700/MT ex-Durgapur & INR 33,500-34,100/MT ex-Raipur, size 5.5 mm.

Anti-dumping duty on imports of Ductile Iron (DI) pipes further extended till 9th Oct’19, as per recent notification by Indian government.

FLAT STEEL

Domestic HRC prices in traders market have come down further by INR 500-1,000/MT against last week and are hovering at almost 4-months low. Similar levels were recorded in the month of Feb’19.

Currently, HRC (2.5-8 mm, IS2062) trade reference price is around INR 40,000/MT ex-Mumbai, INR 40,000-40,500/MT ex-Delhi and INR 42,000-42,500/MT ex-Chennai. The CRC (0.9 mm, IS 513) trade reference price is around INR 45,000/MT ex-Mumbai, INR 43,250-45,000/MT ex-Delhi and INR 46,000-47,000/MT ex-Chennai. Prices mentioned above are basic and extra GST@ 18% will be applicable.

Thus slowdown in auto sector and construction activities amid delayed funding from government has resulted to slump in demand in domestic market. Meanwhile cheaper imports arriving from Japan and Korea under Free Trade Agreement (FTA) resulted to domestic HRC prices under pressure.

Reference Prices as on 29th June 2019 (Week 26)

Products Regions Taxes Prices in INR/MT W-o-W
Pellet Fe 63%, 6-20 mm Ex-Durgapur,Delivered GST at 5% Extra 6,500 +300
Iron ore 6-40 mm, Fe 65% Chhattisgarh Excluding Royalty, DMF & NMET. GST @ 5% extra 3,100 0
5-18mm, Fe 63% Odisha Ex-mines, Incld Royalty, DMF & NMET, GST extra 4,050 -50
Fines Fe 63% Odisha Ex-mines, Incld Royalty, DMF & NMET, GST extra 2,000 0
Coking Coal, Premium HCC CNF India Prices in USD 208 -1
Scrap HMS (80:20) Ex-Mumbai GST at 18% Extra 22,500 -900
C-DRI 80 FeM Ex-Raipur GST at 18% Extra 17,300 +100
P-DRI 80 FeM Ex-Raipur GST at 18% Extra 16,400 +100
Pig iron Steel grade Ex-Raipur GST at 18% Extra 27,000 -400
Billet 125*125 MM Ex-Raipur GST at 18% Extra 28,500 -200
Rebar (12-25mm) Ex-Raipur (Medium Scale) GST at 18% Extra 32,600 -500
Wire Rod (5.5 mm) Ex-Raipur GST at 18% Extra 34,100 0
Structure ( 40 Angle) Ex-Mumbai GST at 18% Extra 35,200 -300
HRC (2.5-8 mm) Ex-Mumbai GST at 18% Extra 40,000 -500
CRC (0.90mm) Ex-Mumbai GST at 18% Extra 45,000 -500
HR Plate(5-10mm) Ex-Mumbai GST at 18% Extra 40,000 -500

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

Indian Export Reference Prices as on 29th June’19

Commodity Particular/Delivery Size and Grade Prices 1W 1M
Pellet FOB India 6-20 mm, Fe 64% 122 120 115
Scrap CNF India HMS(80:20), Europe 300 303 315
Billet FOB India 150*150, IS 2830 418 423 423
Sponge Iron CNF Bangladesh Lumps, FeM 80, India 292 313 325
Pig Iron FOB India Steel Grade 355 355 372
HRC FOB India 2.5-8mm, IS 2062 508 505 525

Prices in USD/MT
Source: SteelMint Research

 

China: Shagang Steel to Raise Scrap Purchase Price by USD 10-15

As per updates received from sources, eastern China’s largest private ferrous scrap consumer and EAF steelmaker – Shagang Jiangsu Steel group likely to announce the price hike for all grades of domestic steel scrap purchase by RMB 70-100/MT (USD 10-15) effective from today (29th June’19). The specific prices shall be based on the price of 2019-F10.

This price hike has observed in the wake of lingering tightness in supply of domestic scrap and recovering profit margins on finished steel encouraging steelmakers to keep their scrap consumption in production high. Against the background of ever-tightening controls on pollution and the persisting high price of imported iron ore, demand for ferrous scrap from all steelmakers has increased, as shared by the sources.

With recent price hike, Shagang Steel is expected to pay RMB 2,700-2,730/MT (USD 393-398) inclusive of 13% VAT for HMS (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang north of Shanghai in China, up RMB 70-100/MT against the last report of RMB 2,630/MT on 18th Jun’19.

Notably, this is the second price hike for domestic scrap purchase observed in Jun’19. Prior to this, the company had reported a hike in the prices due to a decline in the volume of scrap delivered to its works. Extreme weather conditions in provinces south of the Yangtze River are now disrupting steel scrap collecting and sorting while the EAF capacity utilization rate continued to decrease. Thus, domestic steel scrap prices are anticipated to witness moderate rises in the near term amid the seasonal decline in scrap availability.

Following the largest privately owned steel mill’s lead, many leading scrap consumers in eastern regions also have hiked scrap purchase prices by RMB 50-100/MT in China.

Shagang Steel lowered finish long prices for end-June shipments – Steelmaker had lowered finished steel prices on slower sales in the local steel market. Shagang is selling HRB400 16-25 mm dia rebar at RMB 3,970/MT (USD 581) over the mid-June (21th-30th) period, down RMB 100/MT against the last set of prices for mid-Jun’19 shipments. While prices for HPB300 6.5 mm dia wire rod lowered to RMB 4,070/MT (USD 593), down RMB 80/MT as against the last set. All prices are on an ex-works basis, including VAT.

 

Global Billet Market Overview: Week 26, 2019

The boosted Turkey’s scrap import prices are expected to carry along glad tidings for the global billet market trade sentiments. However, the market awaits billet deals to be concluded at high prices.

Turkey imported scrap prices have rebounded by USD 10-12/MT against last week. SteelMint’s assessment of imported HMS 1&2 (80:20) stands at USD 293/MT, CFR Turkey.

Offers from CIS nations marginally gone up: This week offers from CIS nations were assessed at USD 415-420/MT, FoB Black Sea, up by USD 5 against last week. The sentiments were reported marginally strong in the region.

Iran billet export market sentiments remain dull on weak demand: This was another dull week for Iranian billet export market. In fact, the country’s billet export market went through resilient phase throughout the month. This week country’s billet export offers were reported between USD 370-375/MT FoB. The country’s billet export market is battling with US sanctions on increased pressure on SE Asia and Middle East countries.

South East Asia billet market: South East Asia billet import offers are assessed around USD 450-455/MT, CFR levels, the trade sentiments are reported stable this week. Offers from CIS nations to Thailand were assessed around USD 450/MT, CFR Thailand.

The reason which is keeping the marketers in dilemma is US sanctions, which are getting heftier with every passing day.

Vizag Steel floats ocean export tender: Rashtriya Ispat Nigam Limited (RINL)- the state owned steel maker under the Ministry of Steel, has invited a tender for export of 30,000 MT Billets and 20,000 MT Bloom. The due date for bid submission is 02 Jul’19 till 15:00 hrs. The last date of delivery shall be 10 Aug’19 on FoB Basis.

Steel Authority of India – a government of India Company has invited ocean export tender for billets. The tender quantity is reported to be 16,200 MT. The cargo will be shipped from Haldia port and shipping is scheduled by 25th Aug’19. The tender was put up for Prime Mild Steel Non-Alloy Concast billets, size 150*150 mm offered from Durgapur Steel plant and has following specifications – C%:0.17-0.23, Mn:0.60-1.0, S: 0.05 Max P: 0.05 Max Si: 0.10-0.35The last date for bid submission was 28 Jun’19 by 17:00:00HRS [IST].

Vietnam billet offers – This week Vietnam billet (130*130mm, 5 SP grade) offers were reported to be USD 460/MT, CFR Manila. The billet export trade sentiments are reported marginally up this week in Vietnam

Chinese domestic billet prices rally: This week Chinese domestic billet prices settled at RMB 3,620/MT, up RMB 160 against last week. According to SteelMint assessment, the prime reason for such a towering rise is 20-50% steel & sintering production cut in Tangshan until 1st Aug due to curb air pollution. Also, this week’s capacity utilization rate is reported to slow down by 2.39% in Tangshan against last week. Another reason for this high rise in billet prices is expected calm in US-China trade war.