Monthly Archives: August 2019

Global Ferrous Scrap Market Overview – Week 35, 2019

Global ferrous scrap market observed downtrend in almost all major markets this week. Turkey observed further fall in prices in this week’s cargo bookings, while south Asian markets continued to follow the downtrend.  Japan’s Tokyo Steel, as well as China’s Shagang Steel, lowered their scrap purchase price twice this week while South Korea’s Hyundai steel booked Japanese cargo last week after a gap of few weeks.

Turkey  –  Price for imported scrap dropped sharply this week to 2 year low levels, amid low sales of finished steel in Turkey steelmakers resulting in demand for scrap restocking by steelmakers being less urgent. Few deep sea cargoes were booked at lowered prices, while indicative bids remained lower with Rebar prices too touching record low levels.

The deals included one US recycler sold a 42,000 MT of cargo to a Marmara-based mill, comprising of HMS 1&2 (80:20) at USD 270/mt and shredded at USD 275/MT CFR, while another UK based supplier sold a cargo with HMS 1&2 (80:20) at USD 270/MT.

Assessment of US-origin HMS 1&2 (80:20) scrap stands at USD 270-271/MT, CFR Turkey down USD 7/MT from last week. European origin HMS 1&2 (80:20) is assessed at around USD 265-266/MT, CFR Turkey.

Japan – Japan’s mini-mill Tokyo Steel twice lowered its domestic scrap purchase bids this week, on 28th  Aug at its Okayama and Takamatsu works and on 30th Aug’19 at its Utsunomia plant by JPY 500/MT each respectively.

Following both the price cuts, the company is now paying JPY 26,000/MT (USD 245) for H2 scrap delivered to Utsunomiya plant while the price for H2’s delivery to its Tahara and Okayama works stand at 25,500/MT and JPY 23,500/MT respectively.

South Korea – Hyundai Steel has last week booked a bulk cargo vessel for Japanese scrap after a gap of several weeks. The bulk vessel comprising of around 50,000 MT was reportedly booked at JPY 27,000/MT FoB, the same price as its last price revision for Japanese H2 scrap in July’19.

Although the Japanese exporters had increased the price in July’19, Hyundai Steel resisted the hike and kept its bid unchanged throughout. Now with the recent decline in japanese domestic scrap prices, it is likely that the company will further cut its purchase price for Japanese scrap.

China – Following a price hike of RMB 50/MT last week, China’s Shagang Steel announced 2 successive price cuts for all grades of domestic ferrous scrap procurement by RMB 60/MT (USD 7) on 28th Aug and RMB 50/MT on 30th Aug’19 respectively, due to falling billet and steel prices.

Post 2nd price cut, Shagang steel is now paying RMB 2,590/MT (USD 362) inclusive of 13% VAT for HMS 3 (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang north of Shanghai in China. While HMS 1 (thickness not less than 20 mm) and HMS 2 (6-10 mm thickness) stands at RMB 2,670/MT and RMB 2,630/MT respectively.

China – Following a price hike of RMB 50/MT last week, China’s Shagang Steel announced 2 successive price cuts for all grades of domestic ferrous scrap procurement by RMB 60/MT (USD 7) on 28th Aug and RMB 50/MT on 30th Aug’19 respectively, due to falling billet and steel prices.

Post 2nd price cut, Shagang steel is now paying RMB 2,590/MT (USD 362) inclusive of 13% VAT for HMS 3 (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang north of Shanghai in China. While HMS 1 (thickness not less than 20 mm) and HMS 2 (6-10 mm thickness) stands at RMB 2,670/MT and RMB 2,630/MT respectively.

India – Indian market for imported scrap continued to remain silent for the 4th week in a row, with only scarce deals of limited quantity being reported, even as offers continued to drop. Very low sales of finished steel due to floods and heavy monsoon has resulted in production cuts and maintenance for many furnaces and as a cascading effect steelmakers are not requiring any major restocking of inventories, while currency depreciation also remains a worrying concern.

Assessment for containerized Shredded from Europe, UK and USA stands at USD 290-295/MT, CFR Nhava Sheva, down USD 5/MT further against last week, however no major fresh trades witnessed, while some global suppliers withheld their offers amid uncertainty in prices.

HMS scrap saw very few deals being concluded as HMS 1 from Dubai being traded at around USD 270/MT CFR, while few HMS 1 offers from South Africa were heard at around USD 275/MT.

Pakistan – Imported scrap offers to Pakistan moved down all through the week, following the global downtrend, while trades slowed down this week on expectation of further correction by buyers, in addition to the strict custom regulation.

SteelMint’s assessment for containerized Shredded 211 scrap from US, Europe and UK stands at USD 291-293/MT, CFR Qasim, lowering by around USD 6-8/MT against last week’s report. Few deals were also at USD 295/MT were reported in the opening of the week but the prices dropped further as the week progressed.

HMS trades remained poor with the strict custom clearance regulations and additional import duty of 3%, while Dubai HMS offers were assessed at around USD 280/MT CFR. Domestic market remained slow on low demand and FBR’s strict enforcement of rules.

Bangladesh – As containerized scrap market remained uncertain with in terms of prices, few bulk cargo bookings were witnessed by prominent steelmakers n Chittagong as a total of around 62,000 MT of cargo was booked in 3 different vessels from USA and Japan-based suppliers. Offers for imported scrap inched down on globally weak sentiments.
SteelMint’s assessment for containerized Shredded scrap from UK, Europe and the USA stand in the range of USD 308-310/MT, CFR Chittagong dropping slightly against last week with some bookings being reported.

HMS scrap offers dropped further this week, this as well, with a deals of HMS1 from Brazil and Chile origin being concluded at around USD 297/MT CFR. South African and Australian HMS was assessed slightly higher at around USD 303-305/MT, CFR.

 

Central India: Government Extends Rebate on Industrial Electricity Tariffs

In recent update received SteelMint learned that, the Chhattisgarh government has extended rebate of INR 0.80 paise/unit, which got expired on 31st Mar 2019.

The government has extended this rebate till 31 Mar 2020, hence the benefit to the state based steel industries will continue for a year more.

With the announced rebate, the net power tariff charges for industrial units would be around INR 5.00-5.25/unit which was counted earlier near to INR 6.00/unit.

As per furnace owner’s in the state, with the postponed rebate their input cost of Ingot/Billets may be cheaper by INR 600-650/MT, considering about 800 units to make a one metric ton of hot metal.

On an average, the Chhattisgarh based standalone mills(including hot rolling mills) produce near to 5,00,000-6,00,000 MT of Ingot/Billet on monthly basis, in which about 60-70% material consumed within state, while remaining is sold to neighboring states.

It seems that as the plants already running below to margins, the postponed rebate on electricity tariff may not impact on price range. The average required conversion spread (margins) from Sponge P-DRI to Billet cited is about INR 11,500/MT (USD 160) which is currently hovering at INR 11,000/MT (USD 153) in Raipur.

Today, the trade reference prices in Raipur learned at INR 16,000-16,200/MT for Sponge P-DRI, INR 26,500/MT for Ingot, INR 27,100/MT for Billet & INR 30,400-30,700/MT for 12-25mm rebar, ex-plant & excluding 18% GST.

 

What Will Indian Primary Mills Rebar Price in Sept’19 ?

Lower trade volumes and high inventory levels have kept Indian domestic rebar prices under pressure and market participants are waiting to understand market direction.

As per trade participants, stock level with large scale mills is considerably high in comparison to regular basis but there are anticipations that state owned large mills as well as private large mills might roll over the prices for Sep’19 just to maintain the market sentiments.

However they are also assuming that internal rebate will continue to attract buying inquiries just to ease inventory level burden or might lower price further by around INR 1,000/MT (USD 14) across regions due to measured supply along with dull buying inquiries.

As per assessment, currently the large scale mills trade reference price of 12 mm rebar is hovering at INR 35,000-35,500/MT Ex-Hyderabad/Mumbai/Chennai and INR 33,500-34,000/MT Ex-Jharkhand, excluding 18% GST.

Recently central government announced to provide appropriate cash flow through banking channel but few participants expecting that it will take sufficient time to get benefited as NHAI/CPWD/PWD previous payments are still in queue and further ongoing projects will need additional support or timely payment.

Further, looking at current situation they foresee that roll over prices may not support trades due to weak demand amid slow construction activities and another major concern is delayed payment cycle shared by trade sources.

It would be interesting to see how the major mills decide rebar prices for in Sep’19.

 

Chinese Steel Market Highlights- Week 35, 2019

This week Chinese steel prices witness significant fall in the wake of volatile futures along with intensifying US-China trade war. Also in the beginning of this week Yuan depreciated against USD which lead to further fall in domestic prices.

Thus pessimistic market sentiments and slow demand resulted to downturn in nation’s domestic steel prices. On weekly basis steel prices witness downfall of around RMB 100-110/MT.

Along with this, nation’s HRC and rebar export offers registered decline. Meanwhile billet export offers drop sharply over plunge in domestic prices. Coking coal prices also slipped further and iron ore prices rebound this week over volatility in spot iron ore prices.

Volatility persists in spot iron ore prices- Chinese spot iron ore prices opened up this week at USD 86/MT, and fell to USD 81.45/MT, CFR China during the week, however picked up to USD 85.85/MT towards weekend.

As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports increased to 125.25 MnT as compared to 124.65 MnT a week ago.

Spot pellet premium down sharply amid easing supply- Spot pellet premium for Fe 65% grade pellets assessed at USD 24.3/MT CFR China as against USD 30.6/MT CFR China a week before. Pellet premium has witnessed a drop amid thin demand and easing supply in Chinese market.

Pellet inventory at major Chinese ports witnessed rise to 5 MnT, up on weekly basis compared to 4.9 MnT last week.

Spot lump move down on weekly basis- Spot lump premium this week witnessed further fall to USD 0.1200/DMTU as compared to USD 0.1250/DMTU assessed last week.

The continuous fall in lump premium has made the steel mills to review cost comparison between pellet and lumps. Besides this, few mills are heading towards increased usage of lumps in blast furnace replacing pellets.

Coking coal offers slide down further- Seaborne low-volatile hard coking coal prices witness marginal decline this week. Meanwhile absence of clarity on price trend kept coking coal offers on lower side.

Also Chinese spot prices in coking coal market showed downturn over limited trades.

Meanwhile Indian steelmakers are planning to resume restocking activities with the end monsoon season later in the month as they expect further downside in prices.

Currently offers for the Premium HCC grade are assessed around USD 150.75/MT FoB which was USD 153.00/MT FoB Australia in preceding week.

China domestic billet prices fell by RMB 110/MT- This week Chinese domestic billet prices in Tangshan settled at RMB 3,300/MT, down RMB 110 against RMB 3,410/MT in preceding week. This week, billet trade sentiments in China were reported weak.

Chinese HRC export offers slump further over decline in domestic prices- This week Chinese HRC export offers witness downtrend amid weak buying activities from overseas buyers. Also stretching US-China trade feud and widening gap between bids and offers kept HRC export offers on lower side.

Currently nation’s HRC export offers stood at USD 470-475/MT as against 480-485/MT FoB in previous week.

On weekly basis domestic HRC prices in China stood at RMB 3,620-3,630/MT in Eastern China (Shanghai) were slashed by RMB 80-90/MT as against 3,700-3,720/MT in previous week.

Trading activities remain sparse as buyers resist making new purchases in anticipation of further downside in domestic and export prices.

Weakening domestic prices weigh on Chinese rebar export offers- This week nation’s rebar export offers further fell by around USD 2-7/MT on weekly basis following decline in domestic prices.

Meanwhile possibility of lenient production cuts in Tangshan region may reduce nation’s rebar export offers in upcoming months. Also Chinese steelmakers will commence to offer rebar cargoes for Nov shipments. However Nov is considered as beginning of winter season in China, thus slowdown in trade activities may keep rebar export offers on lower side.

Also on occasion of National Day scheduled on 1 Oct’19 construction activities shall be suspended in order to improve air quality. This again will affect rebar prices in domestic and export market.

On an average basis currently nation’s rebar export offers stood at USD 468-473/MT FoB China which was around USD 470-480/MT FoB basis last week.

Meanwhile domestic rebar prices stood at RMB 3,540-3,590/MT (Eastern China) witnessed significant decline by RMB 100-120/MT against RMB 3,660-3,690/MT (Eastern China) a week ago.

Chinese Steel Market Highlights- Week 35, 2019

Particulars

Currency Current 
Price per MT
1 W

1 M

Spot Iron Ore Fines Fe 62%, CNF China USD/MT 86 89 108
Met Coke, 64%, FoB China USD/MT 318 318 315
Premium HCC, CNF China USD/MT 167 167 184
Billet, FoB China USD/MT 475 483 493
Domestic billet prices RMB/MT 3300 3410
Domestic Rebar Prices
(ex-warehouse Eastern China)
RMB/MT 3540-
3590
3660-
3690
Rebar, FoB China USD/MT 470 475 509
Wire Rod, FoB China USD/MT 493 499 522
Domestic HRC Prices
(ex-warehouse Eastern China)
RMB/MT 3620-
3630
3700-
3720
HRC, FoB China USD/MT 473 483 508
CRC, FoB China USD/MT 505 515 545
Plate,FoB China USD/MT 485 493 518

Source: SteelMint Research

 

Thailand Import Steel Statistics, July 2019

Thailand’s Semi finish & Finish long steel imports surged in Jul’19, as per custom data maintained with SteelMint.

Ferrous Scrap- Ferrous scrap import is registered at 0.06 MnT in Jul’19 plunged by 53.84% against 0.13 MnT in Jun’19.
In line, on yearly basis it has been declined by 40% in Jul’19 against 0.1 MnT in Jul’18.

Semi Finish – Nation’s semi finish (Billet/Pig iron) import on monthly basis is registered at 0.49 MnT in Jul’19 surged by 13.95% against 0.43 MnT in Jun’19.
Meanwhile on yearly premises import enlarged by 250% in Jul’19 compared to 0.14 MnT in Jul’18.

Finish Long Steel- On monthly basis country’s finish long steel import is registered at 0.09 MnT in Jul’19 surged by 12.5% against 0.08 MnT in Jun’19.

In context country’s crude steel production remained stable with 0.42 MnT in Jul’19 as compared to previous month.

Commodity wise – Rebar imports registered at 0.07 MnT in Jul’19 up by 16.67% against 0.06 MnT in Jun’19 followed by Structure (Angle & Channel) and Wire rod import is recorded at 0.01 MnT and 0.02 MnT respectively in Jul’19 which remained stable against previous month.

Load Country wise On monthly basis Japan stood as top exporter of finish long steel to Thailand and registered at 0.03 MnT in Jul’19 enlarged by 50% compared to 0.02 MnT in Jun’19 followed by China – 0.02 MnT in Jul’19 (+100%) compared to 0.01 MnT in Jun’19 and Malaysia at 0.01 MnT in Jul’19 down by 50% against 0.02 MnT in Jun’19.

Finish Flat Steel- Country’s finish flat steel import is registered at 0.85 MnT in Jul’19; down by 2.29% against 0.87 MnT in Jun’19, whereas on yearly premises imports moved up by 34.92% in Jul’19 compared with 0.63 MnT in Jul’18.

Graphite Electrode- On monthly basis country’s Graphite electrode import registered at 1,061 MT in Jul’19; up by 5.9% compared to 1,001 MT in Jun’19 and on yearly basis also import increased by 5.36% in Jul’19 as against 1,007 MT in Jul’18.

Mr Rajiv Mangal, President & CEO, Tata Steel Thailand while addressing at SteelMint’s 4th Steel Scrap, Billet & DRI Summit in Bangkok, Thailand shared that with upcoming construction projects and metro projects, Thailand steel industry is expected to see demand boost up from Jan’2020. The government is working on bringing infrastructure changes in airports, metro stations in pipeline. This is expected to boost country long steel demand.

 

Indian Steel Market Weekly Snapshot

During the week-35 (24-31st Aug’19), Indian domestic trade activities were better than the earlier as prices find support with improved spot trades. The mid sized steel mills reported slight fall in inventories amid lessened productions & surged inquiries.

As per SteelMint’s assessment, in these days the prices of Semis products – Sponge iron & Billet rise by INR 500-1,000/MT(USD 7-14). In line Finished long steel prices surged by INR 700-1,200/MT (USD 10-17).

However the Flat steel prices moved down by INR 250-500/MT (USD 3-7) through the traders end owing to poor lifting & limited demand.

IRON ORE & PELLETS

India’s largest iron ore miner – NMDC has decreased by INR 200/MT in both lumps and fines floor prices for Karnataka e-auctions. NMDC received a good response on 28th Aug conducted an auction for 40,000 MT iron ore from its Chhattisgarh mines with 32,000 MT getting booked at base price.

PELLEX decreased to INR 6,050/WMT (DAP Raipur) following reduced domestic offers on 30th Aug’19. SteelMint in conversation with market participants learned that Raipur (central India) based pellet manufacturers decreased offers by INR 200/MT to INR 6,000/MT (Ex-plant). Durgapur SteelMint’s reference, pellet price witnessed at 5,100-5,300/MT, down on weekly basis. Jindal SAW lowered pellet (Fe 63%) offers by INR 300/MT to INR 7,500/MT (delivered Kandla) as against INR 7,800/MT towards the beginning of this week.

As per the SteelMint assessment pellet export realization has been declined this week to USD 92-95/DMT FoB (Al 3%) due to the oversupply and absence of bids.

COAL

Australian coking coal prices have remained relatively unmoved this week amid possible signs of market stabilisation, as buyers largely stayed on the sidelines and waited for a clearer market direction. Chinese spot market activities were muted in the seaborne coking coal market, following the divergence of premium low-volatile prices seen earlier.

Indian end-users seem to wait cautiously for prices to come down further, although a considerable demand from Indian buyers is expected to be generated later in this month as steelmakers resume restocking.

Latest offers for the Premium HCC grade are assessed at around USD 150.75/MT FOB Australia and USD 167.75/MT CNF India.

SCRAP

The Indian market for imported scrap continued to remain silent for the 4th week in a row, with only scarce deals of the limited quantity being reported, even as offers continued to drop. Very low sales of finished steel due to floods and heavy monsoon has resulted in production cuts and maintenance for many furnaces and as a cascading effect, steelmakers are not requiring any major restocking of inventories.

Assessment for containerised Shredded from Europe, UK and USA stands at USD 290-295/MT, CFR Nhava Sheva, down USD 5/MT further against last week, however, no major fresh trades witnessed, while some global suppliers withheld their offers amid uncertainty in prices.

HMS scrap saw very few deals being concluded as HMS 1 from Dubai being traded at around USD 270/MT CFR, while European origin HMS suppliers mostly remained away from the market.

FERRO ALLOYS

Silico Manganese prices inched down marginally in Raipur. Producers believe the prices to go further down in line with tepid demand.

Prices of Ferro Manganese are continuously falling in line with low demand and low-cost material available from imports.

Indian Ferro Chrome prices have gone up in line with low supply as the Chrome Ore dispatches remain affected in Jajpur, which is resulting in shutdown and production cuts of Ferro Chrome.

Ferro Silicon Producers have maintained the prices despite low demand and thin trading activities. Meanwhile, prices in Bhutan are lowered down amid Cash Crunch situation in the month-end.

SEMI FINISHED

On weekly basis domestic Semis prices rose in major locations, in which Billet offers gain by INR 500-1,000/MT and major hike was seen in Central, East & Northern India by INR 1,000/MT.

Inline Sponge iron offers surged by INR 300-900/MT, W-o-W. Meanwhile in Pig iron, the private mills have maintained prices at firm level amid average inquiries following drop furnaces production.

The fresh export offers for sponge iron (79-80 FeM, 95-100% lumps) to Bangladesh reported at near to USD 265-270/MT CPT Benapole(dry port of India & Bangladesh), this is equivalent to USD 280-285/MT CFR Chittagong.

India’s mid sized mills export offers to Nepal is hovering at USD 365/MT for Billet & USD 425/MT for Wire rod, ex-mill, Durgapur.

Punjipatra, Raigarh based steel manufacturers are still facing problems of power cut by JPL. The plant’s are getting power supply of about 12 hrs (50%) per day.

Rashtriya Ispat Nigam Limited (RINL) has invited a tender for export of 10,836 MT Billets, 10,836 MT Wire Rod to Nepal. Interested bidders can submit their bids till 5th Sep’19 at 14:00 hrs.

Vizag Steel has issued an export tender of 25,000 MT basic grade steel making Pig iron (C: 3.5 – 4.8%; Mn: 0.50% max; Si: 1.5% max; P: 0.12% max; S: 0.050% max) for any country other than Nepal. The tender is due on 06 Sept’19.

RINL has invited a tender for export of 15,000 MT Wire Rod and 30,000 MT Bloom. The due date for submission of bids is 5th Sep’19 (Bloom) & 6th Sep’19 (Wire rod). The delivery scheduled by 15 Oct’19.

FINISH LONG

Indian Finish long steel market observed moderate response this week as the rebar prices improved by INR 700-1,200/MT in overall region from week beginning and nominal lifting were also reported on this increased price range through major supplying locations like Jalna & Raipur but demand still needs to be framed in adequate level amid liquidity crunch.

Current trade reference rebar prices (12-25 mm) assessed at INR 31,700-32,000/MT Ex Jalna, INR 30,400-30,700 Ex Raipur.

Central region, Raipur based heavy structure manufacturers have increased their gauge parity by INR 200-400/MT (Light/Medium & Heavy) along with trade discount by INR 300-500/MT to INR 1,200-1,600/MT against last week and current trade reference price stood at INR 35,500-35,600/MT(200 Angle) ex-work.

Trade discounts in Raipur Wire rod currently hovering at INR 1,500-1,700/MT and fresh offers stood at INR 30,700-31,300/MT ex-Durgapur & INR 30,100-30,600/MT ex-Raipur, size 5.5 mm.

Further, the Raipur based wire rod manufacturers have reduced price gap by INR 200/MT to INR 2,400/MT (w.e.f. 28th Aug’19) between Wire Rod to HB wire.

FLAT STEEL

This week domestic HRC prices soften further by around INR 500/MT in few major markets as buyers are unlikely to make any new bookings with further expectations of downside in domestic HRC prices. Limited trades and lacklustre demand along with pessimistic buying sentiments lead to continual fall in domestic HRC prices. Meanwhile seasonal slowdown and liquidity crunch continue to keep domestic HRC prices under pressure in the domestic steel market.

As per SteelMint price assessment trade reference prices for HRC (IS2062, 2.5-8 mm) is currently at INR 36,500-37,000/MT ex-Mumbai & INR 36,500-37,000/MT ex-Delhi. Meanwhile domestic CRC also witness downturn by INR 500- 750/MT this week over limited trades. Thus domestic CRC (0.9 mm, IS 513) trade references prices on weekly basis are currently hovering around INR 40,500-41,000/MT ex-Mumbai & INR 40,000-41,800/MT ex-Delhi .Prices mentioned above are basic and extra GST@ 18% will be applicable.

Upside on Indian steel prices is expected as the demand starts to pick up with arrival of festive season approaching in upcoming months in domestic market. Thus traders have adopted wait and watch mode as major Indian steelmakers are planning to revise domestic HRC prices in first week of Sep’19.

Reference Prices as on 31st August 2019 (Week 35)

Products Regions Taxes Prices in INR/MT W-o-W
Pellet Fe 63%, 6-20 mm Ex-Durgapur,Delivered GST at 5% Extra 5,200 -333
Iron ore 6-40 mm, Fe 65% Chhattisgarh Excluding Royalty, DMF & NMET. GST @ 5% extra 2,900 0
5-18mm, Fe 63% Odisha Ex-mines, Incld Royalty, DMF & NMET, GST extra 3,800 0
Fines Fe 63% Odisha Ex-mines, Incld Royalty, DMF & NMET, GST extra 1,900 -150
Coking Coal, Premium HCC CNF India Prices in USD 171 +1
Silico Manganese (60-14) Ex-Raipur Excluding GST 62,500 -950
Scrap HMS (80:20) Ex-Mumbai GST at 18% Extra 21,600 0
C-DRI 80 FeM Ex-Raipur GST at 18% Extra 17,300 +400
P-DRI 80 FeM Ex-Raipur GST at 18% Extra 16,000 +300
Pig iron Steel grade Ex-Raipur GST at 18% Extra 23,900 0
Billet 125*125 MM Ex-Raipur GST at 18% Extra 27,100 +1,050
Rebar (12-25mm) Ex-Raipur (Medium Scale) GST at 18% Extra 30,500 +1,000
Wire Rod (5.5 mm) Ex-Raipur GST at 18% Extra 30,600 +700
Structure ( 40 Angle) Ex-Mumbai GST at 18% Extra 32,700 +400
HRC (2.5-8 mm) Ex-Mumbai GST at 18% Extra 36,750 -500
CRC (0.90mm) Ex-Mumbai GST at 18% Extra 41,000 -500
HR Plate(5-10mm) Ex-Mumbai GST at 18% Extra 37,000 -250

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

Indian Export Reference Prices as on 31st Aug’19

Commodity Particular/Delivery Size and Grade Prices 1W 1M
Pellet FOB India 6-20 mm, Fe 64% 96 100 117
Scrap CNF India HMS(80:20), Europe 275 279 290
Billet FOB India 150*150, IS 2830 398 398 423
Sponge Iron CNF Bangladesh Lumps, FeM 80, India 283 275 280
Pig Iron FOB India Steel Grade 335 335 350
HRC FOB India 2.5-8mm, IS 2062 462 467 502

Prices in USD/MT
Source: SteelMint Research

 

Global Billet Market Overview: Week 35, 2019

This week global billet market observed few deals in SE Asia. Rest all prime markets remained silent. SteelMint tried to scrutinize the trade silence in prime markets other than SE Asia and learned dipping global scrap prices and slow down in the global economy are the prime reason for this fall.

Another reason for trade silence in major prime markets other than SE Asia is; leading billet producers like India are increasing focus towards the region as the country feel it can conveniently compete with Iranian billet prices in SE Asia. Also India is having inventory of billets amid dull domestic demand.

Billet export offers from CIS witness a sharp drop- This week billet export assessment from CIS nations stands at USD 385-390/MT, FoB Black Sea, down USD 15 against last week. The market sentiments were reported weak in the region.

SE Asia billet market: The SE Asian billet import market witness some shine this week as couple of deals from India is reported to been concluded in the region. SteelMint’s billet export assessment for 150*150mm stands at USD 395-400/MT, FoB India.

This week one of the steel major from India; a government of India enterprise is reported to sell billet to SE Asia of size 125*125 mm at USD 403/MT FoB levels.

Iran billet export offers soften further amid no trades- This was the second consecutive week of the month in which the country witnessed no trades. The billet export offers from the country also got further soften to USD 375-380/MT, FoB, from USD 380-385/MT, FoB last week to see a drop of USD 5/MT, this week.

Vietnam billet offers – This week Vietnam’s domestic billet offers are at USD 450/MT, identical as last week. Amid lower prices in exports, mills were heard preferring billets in domestic market. The marketers believe, they cannot compete with Indian origin billets and hence focusing on the domestic market.

China domestic billet prices fell by RMB 110/MT- This week Chinese domestic billet prices in Tangshan settled at RMB 3,300/MT, down RMB 110 against last week’s close of RMB 3,410/MT including VAT. This week, billet trade sentiments in China were reported weak.

Turkey imported scrap prices fall further – The global ferrous scrap market has witnessed downtrend in almost all major markets this week. Turkey imported SCRAP prices at 2-years low. HMS (80:20) European origin at USD 270/MT, CFR Turkey

 

Chinese Met Coke: Export prices edge down on domestic market pressure

Chinese metallurgical coke export prices have moved slightly lower this week, after having regained momentum over the past few weeks on the back of price upticks in China’s domestic market.

Even as most steel mills have accepted the increased purchasing prices proposed by met coke producers, the Chinese domestic met coke market continues to remain under pressure from thinning steel margins, which in turn have impacted cokeries’ profit margins.

Elsewhere, volatile seaborne coke prices and slower regional steel demand have hit Atlantic metallurgical coke trade so far this year; while Colombia’s export met coke demand from some steel mills has fallen and shipments to Mexico are reduced, according to trading sources.

Chinese export met coke prices staying high – at above USD 300/mt FOB levels – have led to additional trade inquiries in Colombia from India, regardless of higher freight costs.

Meanwhile, a recent analysis by an Indian coal trader Iman Resources has revealed that the Indian steel industry is reducing its coking coal and met coke imports, because of using more pulverized coal injection material (PCI) directly in blast furnaces.

India imported 2.255 million metric tons of met coke in the first half of 2019 during January to July, which’s 28 percent lower as compared against the corresponding period of last year, according to the report.

Price Assessments for Week 35 (26 August – 30 August 2019)

Prices for 64% CSR and the 62% CSR grades are currently assessed at around USD 315/MT and USD 301/MT FOB China respectively, both prices being lower by USD 3/MT as compared to the rates that prevailed in the previous week 34 (19 Aug – 25 Aug’19).

Indian met coke import prices have also witnessed a slight decrease and are currently hovering at around USD 332/MT for the 64% CSR grade, while the 62% CSR price is at around USD 318/MT on CNF India basis.

 

China’s Shagang Steel 2nd Price Cut for Scrap Purchase in a Week’s Time

Eastern China’s largest private ferrous scrap consumer and EAF steelmaker – Shagang Jiangsu Steel group has announced another price cut for all grades of domestic steel scrap procurement by RMB 50/MT (USD 7) effective from 30 Aug’19. Notably, this is steel mills’ 2nd price cut in a week’s time. Prior to this, the company had cut prices by RMB 60 two days back. Falling billet & steel prices resulted in lowering of scrap purchase prices.

As per updates, Shagang steel is now paying RMB 2,590/MT (USD 362) inclusive of 13% VAT for HMS 3 (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang north of Shanghai in China. While HMS 1 (thickness not less than 20 mm) and HMS 2 (6-10 mm thickness) stands at RMB 2,670/MT and RMB 2,630/MT respectively

 

Odisha: Miners Seek Storage Permits for Iron Ore

With their mining leases due to expire by March 31, 2020, merchant miners in Odisha have urged the state government to grant them storage licenses to store iron ore beyond the validity period of their leases.

As per statutory provisions, miners are allowed to store and move their ore for a period spanning six months from the date of lapsing of their lease validity. If any material remains accumulated beyond this time frame, its ownership will get automatically transferred to the state government.

But with over 100 million tonnes of stockpile of iron ore still piled up at the mines heads, miners are vexed about its liquidation. The ore is of baser grade fines and the inventory has grown because there are no takers for it in the domestic market. Exports are the only outlet for such ore but outbound shipments are viable only when international prices are buoyant. But of late with global seaborne iron ore prices mellowing, miners in Odisha are bleak about export potential and hence, are exploring options to store the ore.

“The state government through a previous notification has allowed the end-user industries located within Odisha to create facilities for iron ore storage till March 2022. We have appealed to the government that similar provisions should be made available for the merchant miners as well since it does not appear feasible to clear a huge inventory within six months of March 2020”, said a leading standalone miner.

Realizing the need to build an inventory of iron ore in the light of expiring blocks, Odisha’s steel & mines department on July 24, had issued a notification to provide storage licenses for iron ore to be stored in intermediate stockyards.

The state government has invoked the powers under Rule 10 B of Odisha Minerals (Prevention of Theft, Smuggling & Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007 to permit storage licenses valid only for iron ore.

“The stockyard will be used only for the storage of iron ore meant for captive use of the licensee in its plants located within the state and shall not be despatched for trading purposes or for export outside the state. All the requisite clearances and approvals as required by law shall be obtained and maintained by the licensee”, the government notification read.

In Odisha, 16 merchant mines with approved permits to mine 79 million tonnes of iron ore are expiring by March 31, 2020. The lapsing of these mines will knock off 55-60 million tonnes of iron ore supplies from the markets. Odisha’s iron ore output is crucial since it is predominantly used by end-user industries within the country unlike export-oriented ore of Karnataka and Goa. Merchant supplies hold the key to operations of steel companies, notably, the non-integrated producers- 70 percent of which are dependent on a steady stream of supplies from the commercial miners.