China’s Jiangsu Shagang is set to invest RMB 14.8 billion in a steel integration project which consists of integration and reorganization of some private enterprises in Henan’s Anyang city. The completion of this project will result to an increase in the iron making capacity to 4.94 mn t and steel-making capacity to 5.5 mn t, making it a competitive player of construction steel in central China.
Vietnam’s imported HRC market has witnessed a price hike by $10/t w-o-w tracking gains in Chinese offers. China remained a key supplier amid limited allocations from India. Last week imported HRC offers for Vietnam had climbed to nearly two-years high, as per data maintained with SteelMint.
Last week a deal was heard to have concluded with China’s major – Baosteel at $603/t CFR Vietnam. Few market sources also highlighted another Chinese HRC deal has concluded at $610/t CFR Vietnam levels towards the closing of last week.
Price rally expected to continue in the near term due to:
1. Higher HRC export offers from China: At the beginning of Nov’20 nation’s HRC export offer stood at $528/t FoB China which has touched around $568/t Fob basis towards the end of the month. Nation raised its HRC export offers on the back of higher domestic prices. This led to a steep hike in imported HRC offers to Vietnam. Chinese domestic HRC prices have increased from RMB 3,970/t in early Nov to RMB 4,210-4,220/t (eastern China) towards the end of the month.
2.Indian mills remain less active for exports- Indian mills are not much active in offering HRC for export to Vietnam on higher domestic prices and tight supply.
3. Premium offers from Japan and Korea- Japanese and South Korean mills are offering HRC at premium prices as compared to Chinese mills. Japanese and South Korean mills are offering around $640/t CFR and Chinese mills offering at $610/t CFR basis.Vietnam buyers are bidding at $620/t CFR levels for Japanese & Korean HRC, sources reported
Will imported HRC offers continue to increase?
Imported HRC offers may gain some strength in the near term. Also, an increase in demand with deals getting concluded at higher offers may lead to further hike in offers.
Indian secondary rebar market remained strong with an increase in prices by INR 200-500/t d-o-d. Hike in billet prices improved buying inquiries and trades in rebar, mainly in the western region, which led to a rise in rebar price. Also, few mills raised offers to match up with others, sources shared SteelMint.
SteelMint’s benchmark sponge iron price assessment moved up by INR 400/t (d-o-d) in Raipur (central India) on improved demand. A total of 2,500-3,000 t P-DRI trades have been reported today by local plants at INR 24,800-25,000/t exw, while about 2,000 t trades have been reported from Raigarh at INR 25,000/t on FoR Raipur basis. There are assumptions that price may further increase tomorrow following active trades and strengthening billet prices.
Domestic melting scrap prices remained strong in most of the major scrap consuming markets, increasing by INR 100-600/t on a d-o-d basis. Decent transactions in semi-finished steel, hike in sponge iron & global scrap prices, resulted in an increase in domestic scrap prices, sources reported to SteelMint.
Indian secondary steel market has registered a sharp hike in sponge iron, billet & rebar prices by INR 100-800/t (upto $11) today.
The prices increased majorly in central, western & northern India by INR 500-800/t on account of improved finished steel demand & tightening supply of scrap along with increasing offers. Following the trend, a rise of INR 100-500/t was observed in southern & eastern regions.
- BMM Ispat sold around 10,000 t pellets in nearby market at INR 11,000-11,100/t exw Bellary.
- Indian sponge iron export offers increased by $5/t to $360/t CPT Benapole, equivalent to $375/t CFR Chittagong, Bangladesh.
- Induction grade billet export offers gain by around $10/t to $480/t exw Durgapur, equivalent to $505/t CPT Nepal. However buyers prefer wait & watch due to sharpy surge in offers.
- Raipur based sponge producers have raised P-DRI offer by INR 300-400/t to INR 25,000/t & sufficient bookings reported in the range of INR 24,800-25,000/t exw.
- Raigarh based Singhal Steel offered billet at INR 34,700/t exw.
- Ind Synergy (Raigarh) offered P-DRI at INR 24,200/t & billet at INR 34,600/t exw.
- Neo Metaliks has reported healthy deals for steel grade pig iron at INR 30,200-30,300/t exw Durgapur.
- Visa Steels kept offers unchanged for steel grade pig iron at INR 29,800/t exw Jajpur.
- Bhaskar Steel and Ferro Alloy Ltd, an Odisha based plant offered FeM 80 C-DRI lumps at INR 25,000/t & billet at INR 34,300/t exw Badtumkela.
- BMM Ispat increased offers by INR 300/t for FeM 80 P-DRI lumps to INR 24,200/t exw Bellary & around 4,000 t deals reported in nearby region.
Rebar (12 mm)
- Shrishtii TMT offers reported at INR 37,700/t exw Raigarh (Up by INR 400/t).
- Gallant TMT offers reported at INR 39,700/t exw Gorakhpur.
- Diamond TMT unchanged their offer at INR 41,600/t FoR Ahmedabad.
- Kalika TMT is offering at INR 41,000/t exw Jalna (Up by INR 300/t).
- Sangam TMT offering at INR 39,500/t exw Wardha.
- ARS 550 D offers reported at INR 43,200/t exw Chennai.
Wire Rod & Structure
- Mid scale mills wire rod export offers up by $10-15/t to $530-535/t exw Durgapur (excluding loading charges), equivalent to $555-560/t CPT Nepal.
- Trade discounts in Raipur wire rod stable at INR 400-600/t, however base offers rally by INR 600/t to INR 39,600/t exw. Also, trade reference price in Durgapur increased by INR 500/t to INR 39,000-39,300/t exw.
- Raipur based heavy structure manufacturers, increase the base price by INR 500/t to INR 39,300/t, and given trade discount at INR 400-800/t, current trade price of 200 Angle assessed at INR 41,400-41,800/t exw.
Japan- the world’s leading ferrous scrap supplier witnessed an increase by 22% to 0.89 mn t in Oct’20 as against 0.73 mn t in Sep’20, as per data recorded with SteelMint. Vietnam remained the major buyer and imported 0.37 mn t in Oct’20. Active inquiries for Vietnam origin billets from China, supported scrap buying.
SteelMint daily billet index is assessed at INR 35,200/t (+600), exw Raipur on 30th November, 18:00 IST. Total of about 6,850 t billet trades recorded today, which have hit two-months high. Last highest trade volume of 8,700 t was recorded on 15th Sep’20.
Prevailing positive trends due to expected further hike in finished steel prices by primary mills along with strengthening of raw material prices, resulted in surge in billet prices in Indian domestic market.
- This index has been derived based on transactions, offers, bids and indicative price data sets. Transactions are considered as T1 and given a weightage of 50% whereas other data sets are considered as T2 and given a weightage of the balance 50%.
- Transactions (T1)- Thirteen trades were recorded in the 2:30 pm to 5.30 pm SteelMint trading window and considered for final price calculation as T1 inputs. Out of which, five trades were recorded at INR 35,200/t, three each at INR 35,100/t, INR 35,300/t & one trade each at INR 34,800/t & INR 35,400/t. The average price of these thirteen transactions was INR 35,200/t and given a 50% weightage in the final price calculation.
- Other Price Indicators – bids/offers/indicative (T2)- Fourteen offers reported in the trading window and considered as T2 inputs. The average price of these was INR 35,247/t and given a 50% weightage in the final price calculation.
The final price for billet exw Raipur was at INR 35,223/t, rounded to INR 35,200/t exw.
For detailed methodology – Click here
Imported scrap market in South East Asia has witnessed further hike in offers with Vietnam remaining the most active amongst other nations. Offers have increased significantly over a week, while global suppliers are more likely to involve in better deals as mostly South Asian steel mills are currently more active in bookings ahead of winter holidays.
Japanese scrap prices for Vietnam surge by $10: Bulk imported scrap offers to Vietnam have increased sharply further this week. SteelMint’s assessment for Japanese origin H2 bulk stands at $355/t CFR levels, moving up by $10 w-o-w basis. Sources reported few deals of Japanese origin to have concluded last week.
Imported bulk scrap assessment for USA origin HMS 1&2 (80:20) now stands at $370/t CFR Vietnam level, increasing considerably by $25 on a weekly basis.
BF grade billet export offers from Vietnam were reported at $490/t, FoB Vietnam levels towards the closing of last week. Active billet export deals for China, supported imported scrap trades.
Indonesian scrap market remained less active on high offers: Indonesian steel market mostly subdued on a shortage of containers, witnessing less buying activities throughout the week. Whereas, imported scrap market has slowed down on strong domestic market demand in many countries. Offers remained mostly stable on a weekly basis.
Recent offers –
- PNS in 20 ft container- $340/t CFR Jakarta
- Busheling in 20 ft container- $355-360/t CFR Jakarta
- Shredded 211- $340/t CFR Jakarta
The steel industry has maintained its steady growth despite the COVID-19 pandemic, recording 2.3% growth in the second quarter and 5.6 % in the third quarter of 2020, as per reports.
Limited scrap offers reported to Thailand: Central American HMS 1&2 (80:20) offers increased by $5/t w-o-w to $300-305/t CFR Thailand level. No firm offers were reported from Australia owing to availability concerns.
Indian Oil Corporation Ltd. (IOC) has conducted online auctions of RPC (Raw Petroleum Coke) from its various refineries on 26th Nov’20 for intrastate consumers.
Results of the auctions are enumerated as follows:
|State||Refinery||Quantity Offered Within-State (t)||Quantity Sold Within-State (t)||Reserve Price (INR/t)||Bid Price (INR/t)||Quantity Offered Outside-State (t)|
Delivery period for the within-state e-auctions will be for 45 days. Accordingly, intrastate dispatches has commenced from 27th Nov’20 till 10th Jan’21.
This auction received a good response and entire quantity was sold out at Barauni refinery for both Groups A and B materials. While Group A was sold at the reserve price of INR 19,080/t, Group B was sold at a premium of INR 40/t at INR 18,620/t.
Meanwhile, the response at Koyali refinery is also quite satisfactory considering the lower customer base in Gujarat. In all probability, this is the highest quantity ever sold in an intrastate auction at Koyali.
Outside-State auctions have been scheduled for Koyali refinery on 28th Nov’20 for the leftover quantity of 12,300 t from the Within-State auction.
The changes in reserve prices in this auction as compared to the last auction are as follows:
|Reserve Price Current Auction (INR/t)||Reserve Price Previous Auction (INR/t)||
Notably, the increase in reserve price is higher in case of Koyali as compared to Barauni. This is due to the reason that the last auction for Koyali was conducted in 1st week of September, after which pet coke prices have increased in the market. The last auction for Barauni was conducted in the first week of this month itself and hence the increase is nominal.
Market participants expect that there would be good response from the Outside-State consumers in the forthcoming auction. This is due to the fact that at present the availability of anode grade RPC is very limited in the international market.