Monthly Archives: October 2020

India: MOIL reduces manganese ore prices by upto 7.5% for Nov’20

MOIL has reduced the prices of Manganese ore to maintain price parity with seaborne manganese ore prices and also considering the falling prices of manganese alloys. Prices of Ferro grade is reduced by 7.5%, while Silico manganese grade is reduced by 5% from the prevailing prices in Oct’20, w.e.f 01-11-20.

Price parity with the international manganese ore prices:
According to Customs, Indian manganese ore imports registered a significant hike of 73% m-o-m in Sep’20. Meanwhile, the majority of imports happened for grades between 35% to 44%. Thus, maintaining price parity with international prices becomes very crucial. Last month, the prices of MOIL were higher than the imported ores, however, logistics is always in favour of MOIL for supply to Raipur-based manganese alloys producers (close proximity to MOIL), and also as immediate delivery is possible from MOIL, but not from imports.

International prices of manganese ore registered a fall of 7% for South African Mn 37% CNF India, owing to the downtrending steel market in India and higher inventories at the Chinese ports. MOIL has had to reduce its prices to maintain price parity with import prices.

Downstream Alloy Prices:
Last month, when MOIL increased the prices by 7.5%, it went against the expectations of the domestic manganese alloys producers. Meanwhile, in the current month, prices of silico manganese registered a fall 3% in Raipur and 4% in Durgapur owing to dull demand in the market. The market expectation for Nov’20 was that MOIL will reduce prices by 15%. However, this marginal reduction might not bring a sigh of relief to the silico manganese producers.

 

India: MOIL reduces manganese ore prices by upto 7.5% for Nov’ 20

MOIL has reduced the prices for all grades of Manganese ore by up to 7.5% m-o-m for Nov’ 20, w.e.f 01-11-20. Prices of Ferro grade is reduced by 7.5%, while Silico manganese grade is reduced by 5%. Seaborne manganese ore prices have been on a continuous decline prompting MOIL to reduce prices.

 

India: Bids increase by INR 700/t in SAIL’s Bolani iron ore fines auction

Steel Authority of India Limited (SAIL) conducted e-auctions from its Odisha and Chhattisgarh mines. The company received bids for entire quantity put to auction. In the auction conducted from Bolani mines, bids for 104,000 t fines (Fe 62.5%) stood at INR 3,180-3,200/t (loaded into rakes and excluding royalty). The bids fetched are up by INR 700/t against last auction conducted in 1st week of Oct.

 

Weekly: Indian iron ore market overview

Iron ore prices in Odisha have increased further due to tight availability in merchant market. Miners like Rungta, Essel Mining raised fines offer by INR 200-250/t. Orissa Mining Corp has raised iron ore base price by INR 200/t for upcoming auction. NMDC is yet to announce its price revision.

India’s state-owned steelmaker, Steel Authority of India Limited (SAIL) has sold over 1.5 mnt t of iron ore fines in the merchant market through auctions so far in CY’20 (till Oct) as per data maintained with SteelMint.

Odisha – Amid scarcity of ore Aditya Birla Group-owned – Essel Mining has increased iron ore fines price by INR 300/t. Followed by another major miner – Rungta mines has raised iron ore fines price by INR 250/t, as per the sources.

Odisha’s leading miner – Odisha Mining Corp (OMC) has scheduled its next iron ore e-auction on 3rd Nov’20. The auction is being conducted for 545,000 t iron ore fines. The miner has increased the base price by INR 200/t against last auction’s base price held in Sep’20.


Base prices in INR/t on ex-mines basis; including royalty
Source: SteelMint Research

Karnataka – In a recent Karnataka e-auction held on 21st Oct’20, sold quantity totaled to 300,000 t (272,000 t iron ore fines and 28,000 t lumps) from a total of 365,000 t. The bids in the auction increased upto INR 520/t. JSW Steel Ltd stood the largest buyer at INR 132,000 t followed by BMM Ispat Ltd at INR 64,000 t. Veerabhadrappa Sangappa & Company stood the largest supplier at INR 108,000 t followed by Vedanta Ltd at INR 100,000 t.

India iron ore prices-:

 

Weekly: Indian steel market snapshot

Indian spot steel trades in the secondary market remained supported during the week 44. As per SteelMint’s assessment, the semi finished market sentiments have improved as domestic sponge iron & billet offers increased by INR 200-1,000/t. Indian primary mills are likely to hike finished steel prices by INR 1,000-1,500/t for Nov.

On the other hand, the finished long steel market of mid scale mills have noticed limited buying inquiries & trade activities in the market. However, strengthening semis prices have pushed rebar manufacturers to increase the offers by INR 200-1,500/t w-o-w in major markets.

In context to finished flat steel, domestic HRC prices in India have increased by INR 250/t w-o-w in the trade market as key Indian players announced a second hike in prices in October.

Iron Ore & Pellets

Iron ore prices in Odisha have continued to increase due to tight availability in the merchant market. Aditya Birla Group-owned – Essel Mining has increased iron ore fines price by INR 300/t this week. Another major miner – Rungta mines has also raised iron ore fines price by INR 250/t. Odisha’s leading miner – Odisha Mining Corp (OMC) has scheduled its next iron ore e-auction on 3rd Nov’20 and increased the base price by INR 200/t against last auction’s base price held in Sep’20.

  • SteelMint’s bi-weekly domestic pellet index “PELLEX” increased by around INR 150/t this week to INR 9,100/t, DAP Raipur. Few pellet makers from Raigarh and Jharsuguda have hiked offers by INR 200-300/t in the last three-four days. They are also planning to hike offers further. Market participants told SteelMint that amid scarcity of high-grade ore there are chances of lowering of pellet grade to Fe 62% compared to previous grade of Fe 64/63%.
  • SteelMint’s pellet export index (FoB east coast India) has remained largely stable on weekly basis and stood at $126.5/t on 28th Oct’20. Market participants still expect Chinese stricter pollution control norms to boost pellet demand in the coming term, however some traders highlighted the market to have remained less active. One pellet export deal was heard to have concluded for 55,000 t from eastern India. The deal was concluded at around $136/t CFR, China for Fe 63% and 3% Al pellet for mid Nov’20 shipment.

Coal

  • Australian premium hard coking coal price rose marginally this week as buying interest turned positive following higher transacted prices for some December-laycan cargoes.
  • However, Chinese demand remained subdued amid new restriction on coal imports from Australia, although China’s steel production has been running at record levels.
  • Meanwhile, steel mills in China turned to countries such as Canada to source premium hard coking coal, after Australian coal sales to China came under an informal ban.
  • Nevertheless, the seaborne coking coal market is expected to strengthen in the ongoing quarter amid continued recovery in steel demand from global industrial and construction activities.
  • Latest offers for the Premium HCC grade are assessed at around $109.00/t FOB Australia, $137.00/t CNF China and $120.80/t CNF India.

Ferrous Scrap

Imported scrap offers moved up further, following a global price trend. Tight scrap availability remained the major issue behind price uptrend because of the low scrap generation due to the pandemic. Major scrap supplier countries are now entering into another lockdown phase, as many countries facing problems due to second wave of COVID-19 pandemic. While steelmakers actively restocking ahead of winter holidays and expected a further price hike on the back of the recent hike in sponge prices.

  • Gujarat based major steelmaker had booked bulk cargo earlier this week, sources have reported to SteelMint. The cargo comprises, around 14000 t of UAE and South Africa origin HMS 1, and the deal was concluded at $305-310/t CFR level.
  • SteelMint’s assessment for Shredded scrap in containers of UK origin stands at $323/t CFR Nhava Sheva, up $5/t w-o-w.

Ferro Alloys

  • Indian silico manganese prices remained stable w-o-w amidst moderate demand in both the domestic and export market with limited transactions.
  • Prices of ferro manganese remained stable despite dull demand in the domestic market. Export demand remains low to moderate and the prices remain stable.
  • Indian ferro chrome prices went up by INR 1000/t despite limited demand. Increased chrome ore prices are refraining producers from lowering down the offers.
  • Indian ferro silicon prices remained stable at INR 80,000/t despite the overall downtrend in the steel market. Few bulk deals were heard to be concluded at lower levels also.

Semi Finished

On a weekly basis, Indian semis market showed improvement, in which domestic sponge iron & billet offers surge by INR 200-1,000/t.

  • SAIL is going to conduct an auction for 8,000 t prime steel grade pig iron from Bhilai Steel Plant, Chhattisgarh. The auction is scheduled on 03 Nov’20.
  • Vizag Steel has scheduled an e-auction for 4,000 t pooled iron on 03 Nov’20.
  • Tata Metaliks (TML) has resumed production operations at one of its blast furnaces from 25 Oct’20, which had gone for repair & maintenance on 19 Sep’20.
  • Indian sponge iron export offers to Bangladesh rally by $10-15/t this week with fresh offers at $315/t CPT Benapole, equivalent to $325-330/t CFR Chittagong.
  • Steel grade pig iron prices moved up by INR 300-600/t across major markets on account of supply shortage along with strengthening sponge iron & billet prices.
  • Induction grade billet export offers slightly up by $3-5/t to $415-420/t exw Durgapur, equivalent to $435-440/t CPT Nepal.

Finished Longs

India’s finish long steel market of mid-sized mills in this week have gone through with moderate response in terms of buying inquiries & trade activities in the market. As per our conversation with rebar manufacturers they didn’t observe adequate demand in the market but high raw material cost have pushed them to increase the offer in rebar by INR 200-700/t w-o-w in most of the major markets, except in Bangalore where prices surged more than INR 1,500/t.

  • Mid scale mills wire rod export offers increased by $15-20/t (w-o-w) to $470-475/t exw Durgapur, equivalent to $495-500/t CPT Nepal.
  • Trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 33,700-34,000/t exw Raipur, INR 35,600-36,000/t exw-Jalna.
  • Trade discount given by Raipur based heavy structure manufacturers is maintained at INR 900-1,200/t and the trade price of 200 Angle is at INR 38,100-38,400/t exw.
  • Trade discounts in Raipur wire rod is currently at INR 500-700/t and trade reference prices stood at INR 34,400-34,600/t exw Raipur & INR 35,500-35,800 exw Durgapur, size 5.5 mm.

Finihed Flats

Domestic HRC prices in India have increased by INR 250/t w-o-w in the trade market as key Indian players announced 2nd hike in prices in October. SteelMint’s benchmark assessment for commercial-grade HRC stands at INR 42,500-43,500/t exy Mumbai. Meanwhile in other trade markets, prices have increased up to INR 750-1000/t w-o-w basis.

  • All the major steel manufacturers are planning for a further hike in Nov by around INR 1,000-1,500/t both in HRC and CRC. In addition to tight supply and robust downstream demand, hike in iron ore prices has also led to hike in steel prices.
  • However, major stockists in northern India mentioned that although mills are pushing for increase but it’s not viable.On similar lines, few trade sources in Mumbai shared that, “Restocking demand from stockist seems to have completed, but end use segment especially from construction sector has not yet picked up “

SteelMint price assessments of key trade markets

  • HRC (IS 2062, 2.5-8 mm) prices are assessed at INR 44,500-45,000 (exy Delhi) while INR 43,500-44,500/t (exy Chennai).
  • CRC (0.9 mm IS513 GR) are currently seen at INR 53,000-54,000/t (exy Delhi) and INR 53,500-54,500/t (exy Chennai).
  • Prices do not include GST @18%.

Reference Prices as on 31st Oct’20 (Week 44)
Prices are exw & exclusive of GST

Indian export reference prices as on 31st Oct’20
Prices in $/t
Source: SteelMint Research

 

Australian coking coal prices to drop on imminent oversupply

Australian coking coal prices ended tad higher this week following higher transacted prices for December-laycan premium cargoes, although Chinese demand remained subdued amid new restriction on coal imports from Australia.

Until this week, Australian coking coal prices have been crashing as demand sentiment weakened amid growing panic over the impact of probable coal import restrictions in China.

Oversupply could be stemming from Chinese demand loss, weighing down on prices—

Oversupply concerns have emerged amid deferrals and cancellations of pre-contracted coal shipments by Chinese buyers, following the recently rumored import ban on Australian coals.

While Chinese steelmakers stayed on the sidelines awaiting clarity on port restrictions, ex-Chinese steelmakers showed no urgency to book cargoes in hopes that offers could fall further in light of the current market weakness.

Despite several November laycan cargoes of Australian premium coking coals being offered at competitive prices, there is no incremental demand to liquidate the excess supply. This is because there has not been any significant improvement in steel product sales across major countries importing coking coal from Australia, viz. Japan, India and South Korea.

Indian market participants are also treading carefully while awaiting clarification on the rumored Chinese ban on Australian coal imports, because it will inevitably reduce demand for Australian coking coal, and near-term prices should decrease further.

Weather-related potential supply disruptions could counteract oversupply—

There is an increased risk of supply disruptions in Australia from La Nina wet weather conditions, which could reverse the negative price effects of an imminent oversupply situation looming in the Australian coking coal export market.

A sudden surge in demand for US-originated coking coals was lately being heard as Australian suppliers withheld offers citing weather-related uncertainties, especially with the high probability of cyclone La Nina severely disrupting outbound shipments from Australia.

India Coal Import Shipment Vessel Lineup

CoalMint’s latest vessel lineup data reveals that a total quantity of 837,790t of Australian coking coal has reached various Indian ports by 30 Oct’20 incl. 259,500t at Dhamra (Odisha), 74,524t at Gangavaram (Visakhapatnam), 116,266t at Haldia (West Bengal).

Price Assessments

Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $109/t and $100/t FoB Hay Point, Australia.

For Indian buyers, these prices amount to $121/t and $117/t respectively on CNF India basis.

Australia-India dry bulk freight rate is assessed at $11.80/t for delivery by Panamax vessel class.

Near-term Outlook—

Australian coking coal prices are likely to be adversely affected in the short term, though demand has been picking up from key importers outside of China, viz. India, Japan and South Korea.

Nevertheless, the seaborne coking coal market outside Australia is expected to strengthen in the ongoing quarter amid continued recovery in steel demand from full-fledged resumption of industrial and construction activities in China.

~

By Aditya Sinha

 

China: Weekly coal and coke market highlights

Chinese domestic metallurgical coke prices remain supported amid tight supply and firm demand.

CoalMint assessed the latest price for met coke with 12.5% ash in North China at CNY 2,130/t ($324.5/t FOB China), up CNY 20/t ($11.3/t) on the week.

Meanwhile coal importers in China have turned away from the seaborne market following the widespread rumor on the country’s possible ban on Australian coal imports.

China’s import halt of Australian coking coal erode steelmaking margins

With China’s steel production running at record levels, steelmakers have been obliged to seek alternative coking coal supply, after Australian coal sales to China came under an informal ban.

While steel mills in China turned to countries such as Mongolia, Russia and Canada to source premium hard coking coal. However, the spot availability of alternative origins is low, forcing Chinese steelmakers to use more expensive domestic coking coals, thereby eroding their profit margins.

Alternative seaborne origins such as Canada, the US, Mozambique, Russia and Mongolia are mostly overbooked, or in short supply. Besides, it takes long time to ship coal from the Americas to northern China, which would result in late arrivals for Chinese buyers seeking spot cargoes to cover immediate restocking needs.

Furthermore, spot availability of coking coal from Russia and Mozambique is reportedly tight at present.

Chinese domestic met coke prices continue uptrend on coking coal shortage

In consideration of the restrictions on Australian coal imports, many Chinese steel mills have expressed concerns that met coke prices would increase due to shortage of coking coal supply, thereby squeezing steel margins.

Coking coal supply tightness, coupled with de-capacity and replacement measures, have already pushed up the country’s met coke export prices to such high levels which are incompetent against other exporting nations.

Chinese steel mills fear that coke producers might propose another round of price hike in the near term, even after the fifth round of uptick by CNY 50/t has been largely accepted by steelmakers in Hebei and Shandong.

Although steel mills might have less bargaining power amid supply tightness, some traders anticipate that poor steel margins and uncertainty surrounding downstream sales might exert downward pressure on domestic met coke prices in China.

However, increasing steel production capacity in Southeast Asia is expected to support coke demand, while limited supply would support imported coke prices.

 

SteelMint: India’s domestic steel scrap index remains stable

SteelMint’s domestic steel scrap index remained stable today (31 Oct’20). The index for melting scrap (end cutting) is assessed at INR 28,200/t DAP Mandi Gobindgarh basis. Marginal trade volumes were observed, however buying inquiries in semi-finished steel remained limited today.

The Index also derives the HMS 80:20 scrap (Heavy, Med) and CR Sheet cutting prices traded in the region.

Scrap Grade and Spread Calculation: (Mandi Gobindhgarh)

Scrap Type Name Yield Spread (Difference from Basic)
HMS Old Scrap 88-90% Basic
HMS 80-20 (Selected) 94-96% Basic + 2,000-2,500
End Cutting (Structure/Rebar) 97-98% Basic + 3,700-4,000
CR Sheet Cutting 98% Basic + 4,700-4,900

Prices in INR/t, DAP (Delivered at Plant), Source: SteelMint Research
Updated: Week 44 (26 Oct – 01 Nov, 2020)

Steel Melting Scrap Assessment as on 31st Oct’20

Scrap Type Name Yield Price Min Max
HMS 80-20 (Selected) 94-96%  27,000  26,800  27,200
End Cutting (Structure/Rebar) INDEX 97-98%  28,200  28,000  28,400
CR Sheet Cutting 98%  29,200  29,000  29,400

Prices in INR/t, DAP (Delivered at Plant)

To see SteelMint’s Melting Scrap Assessment, pricing methodology and specification documents, Click here

What is SteelMint Indian scrap index – SteelMint’s assessment of Mandi scrap reflects the prices of different melting HMS grade generated and traded in the domestic market. SteelMint gathers and verifies information from buyers and sellers active in the physical spot market. The data obtained by SteelMint, are normalized for yield, dimensions, density, location and other terms of trade to the specifications.

Why this index? India’s National Steel Recycling policy mentioned that the efficient use of scrap for steel production becomes very crucial for India as 35-40% share has been envisaged from scrap-based steel production in the journey of 300 mn t pa by 2030. This shall increase the requirement of steel scrap sharply from the present level of around 30 mnt.

Methodology – Market data, including deals, bids, and offers that meet the delivery and quality criteria are considered for price assessments. The highest importance in the price calculation process is assigned to confirmed deals (T1) where either a buyer or seller has provided details of the transaction. Deals of only reputed and trustworthy producers and trading firms are included in the price collection and calculation process. Indicative prices, confirmed bids and offers are also considered valuable for the pricing process (T2). The index has been calculated using an average of T1 and T2 price inputs.

To provide feedback on this index or if you would like to contribute by becoming a data partner, please contact – abhishek.bhalla@steelmint.com