Monthly Archives: December 2020

India: Supply crunch push ferrosilicon prices up

  • Indian ferrosilicon producers have escalated their offers by 15% ex-plant w-o-w
  • High domestic demand and lockdown in Bhutan are the key factors
  • SteelMint understands that once imports resume prices might come back to the levels of INR 75,000-80,000/t

Indian ferrosilicon prices initially went up in line with the international cues and since then have continued to increase till present. The increase in the prices was supported by the increasing steel prices in the country and the lockdown in Bhutan. This led to an increased supply crunch in the market, as producers weren’t able to dispatch materials on short deadlines.

Due to lockdown in Bhutan, Guwahati producers escalated their offer levels early this week. Bhutanese producers are now offering material at INR 1,10,000/t Ex-plant and Guwahati producers are offering at higher levels, but not many deals were recorded from Guwahati.

Producers are now more interested in the domestic market than exports as export prices are lower than the domestic market. On the flip side, due to higher domestic prices now, the chances of imports increase. Many traders believe that once imports start flowing in, prices might come back to the normal levels of INR 75,000-80,000/t.

Outlook:
Prices of ferrosilicon in the Indian market are expected to increase for the short term till imports overtake the market. Meanwhile, the demand is still remaining moderate in the market.

 

 

Indian low-grade fines export index up by $3.5/t w-o-w, market awaits clarity on future trends

SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index increased by $3.5/t this week and stands at $91.5/t FoB east coast India. Trade sources have adopted the ‘wait & watch’ approach due to sharp volatility in iron ore and steel futures seen this week. Indian traders cited that spot iron ore prices in China were seen on a constant decline so far till yesterday, however some recovery was seen in futures today.

Price indicators – One confirmed trade was reported for Jan’21 laycan on index basis. SteelMint has received thirteen indicative prices and offersduring the publishing window, out of which only eleven were considered for price calculation as T2 inputs, with an average price of $91.5/t FoB India.

Rationale: The index has been calculated using an average of T1 and T2 price inputs. Transactions confirmed by either a buyer/seller are designated as T1 input while bids, offers, and indicative prices are designated as T2 inputs. Both T1 and T2 categories of inputs carry 50% weightage each in price calculation for FOB price assessment.

Market highlights –

  • Spot iron ore fines price decreased by $3/t w-o-w – Chinese spot iron ore fines (Fe 62%) index decreased by around $3/t on a weekly basis and stood at $ 158.79/t CFR China yesterday against $163.05/t a week before. However, on a daily basis spot prices index decreased by around $3.45/t yesterday.
  • Futures rebound after declining early this week – Dalian iron ore futures’ contract of May’21 closed at RMB 996/t today against RMB 1,036 last week.
  • Iron ore stocks at Chinese ports decrease- Iron ore inventory at major Chinese ports has decreased this week. Iron ore inventories fell slightly by 0.2 mn t to 126.75 mn t as per data maintained by SteelHome.
  • SteelMint’s assessment for Indian low-grade iron ore fines (Fe 57%) increased this week and stands at INR 3,500-4,000/t (ex-mines, incl. Royalty, DMF and NMET).
 

Indian steel mills aim for a significant hike in flat steel prices in Jan’21

Indian steelmakers are eyeing for a substantial hike in domestic flat steel prices for Jan’21 deliveries. Tight supplies and robust demand in the domestic market are the factors which may result in hike in steel prices. Tata Steel has already made the official price hike announcement and others are likely to follow the suit, sources reported to SteelMint.

Effective list prices of mills-

  • AM/NS India increased HRC list prices on 29th Dec’20 by INR 1,000/t and CRC prices by INR 1,500/t.Effective prices of HRC stands at INR 52,750/t and CRC at INR 63,000-63,750/t.
  • Tata Steel India has today raised HRC prices by INR 5,000/t and CRC by INR 6,000/t. Effective prices of HRC stand at INR 56,000/t and CRC by INR 67,000/t
  • Prices are on exy-Mumbai basis exclusive of GST @18%

It can be recalled that in Dec, mills announced four price hikes. The first hike was made by around INR 2,000/t, the second hike by INR 1,000-1,500/t and the third hike by INR 1,000-1,500/t in Dec’20, and the fourth hike by around INR 1,500-2,500/t

The domestic flat steel market continues to remain strong due to :

1. Inflated demand from OEM’s-
Major Indian steel mills are delaying supplies due to lower availability of material. Inflated demand from OEM’s has resulted in bulk orders with the mills. “Demand from OEM’s has increased by around 20-25% and this inflated demand resulted in the shortage in the trade market”, shared by Mumbai based distributor. Thus supplies continue to remain under pressure in the traders market and turn resulted in a significant hike in a trade

2. Export bookings- Market sources shared with SteelMint that major steel mill based in southern India have made their export bookings for Feb’21 shipments. Further mills will resume their export orders for March shipments. Mills have mainly exported HRC to Europe on higher price realizations as compared to domestic prices. The last offers were heard to be around $775-800/t CFR basis. Increased export offers prompted mills to raise domestic prices.

3. Boost in auto and consumer goods demand- The passenger vehicle industry in India is set to record its fifth straight month of double-digit sales growth in December. Dealerships have reported strong sales in the first 20 days of this month, SteelMint learned from market reports. Also with the arrival of the COVID vaccine consumer durable demand is expected to remain optimistic.

Prices in the trade segment-As per SteelMint’s benchmark price assessment, domestic HRC prices stood at INR 54,500-56,000/t and CRC prices at INR 64,500-65,000/t (exy-Mumbai).Prices mentioned are basic and GST @18% is applicable.

Will this price trend continue in Jan ’21 ?
Few market participants shared with SteelMint that,” We are hopeful of price decline in mid of Jan. Also OEM’s and vendors are feeling the pinch of unbearable pressure of steep hike in prices. Also, the Indian government may intervene because infrastructure cost is up by 20-25% and a steep surge in the cost of govt projects”.

 

India: Melting scrap prices witness slight fluctuation

Melting scrap prices observed nominal fluctuations by INR 100-200/t in most of the scrap markets, trade sources reported to SteelMint. In the Alang market, ship-breaking scrap prices fell by INR 400/t on a d-o-d basis. Adequate availability was reported in the Jalna market, however northern and southern regions observed tight availability. According to trade participants, near term prices may remain range-bound without any major contraction.

 

Indian secondary rebar prices up by up to INR 400/t ($6)

Indian secondary rebar prices continued to rise by INR 200-400/t on a d-o-d basis in almost all major markets except in a few specified markets of the southern and western regions. As per market participants, appropriate demand and buying inquiries may keep rebar prices supportive in the near term. Current trade reference price for 12 mm rebar stands at INR 43,600-43,800 exw Raipur and INR 48,600-48,800 exw Jalna.

 

Indian DRI, billet and rebar update – 31 Dec

Indian spot trades of semi-finished & finished long steel products remained subdued & the prices have recorded a slight fluctuation of INR 100-300/t across markets today.

Sources are assuming prices to find support on account of sufficient orders along with further hike in list prices by primary mills for the Jan’21 deliveries.

Raw Material

  • Karnataka based BMM Ispat offered raw pellets at INR 11,900-12,000/t exw Bellary.

Semi Finished

  • Induction grade billet export offers remained strong and floated at around $540/t exw Durgapur, equivalent to $565/t CPT Nepal, via road delivery.
  • Raipur based sponge P-DRI manufacturers have kept offers stable at INR 25,900-26,000/t & deals reported at INR 25,800-25,900/t exw.
  • Visa Steels concluded deals of around 1,000 t steel grade pig iron in local region at INR 35,000/t exw Jajpur.
  • Ind Synergy (Raigarh) offered P-DRI at INR 25,500/t & billet at INR 39,000/t exw.
  • BIOP Steels in South India has offered FeM 80 C-DRI lumps at INR 27,000/t exw Bellary.
  • BMM Ispat has kept offers unaltered for FeM 80 P-DRI lumps at INR 27,000/t exw Bellary.

Rebar (12 mm)

  • GK TMT offer stable at INR 46,600/t exw Raipur.
  • Diamond TMT offer reported at INR 49,000/t FoR Ahmedabad.
  • Kalika TMT is offering at INR 48,800/t exw Jalna (Up by INR 300/t).
  • BS TMX TMT offers reported at INR 43,500/t exw Raigarh.

Wire Rod and Structure

  • Mid scale mills wire rod export offers stood at around $625/t exw Durgapur, equivalent to $650/t CPT Nepal.
  • Trade discount in Raipur wire rod is hovering at INR 1,000/t & trade reference price stable at INR 44,200-44,600/t exw Raipur & INR 44,800-45,200/t exw Durgapur, size 5.5 mm.
  • Raipur based heavy structure manufacturers, kept stable their base price at INR 44,000/t, and maintained trade discount at INR 700-1,000/t, current trade price of 200 Angle is at INR 45,900-46,300/t exw.

Reference prices as on 31st Dec’20

 

SteelMint’s benchmark sponge iron prices gain by INR 200/t ($3)

Benchmark sponge iron (P-DRI) prices increased by INR 200/t to INR 25,900/t exw Raipur (central India). A total of around 3,000 t P-DRI deals were reported at INR 25,800-900/t as against offers of INR 25,900-26,000/t exw Raipur. Few buyers have resumed purchases on expectation of positive trend in Jan’21 amidst strengthening billet prices, sources shared with SteelMint. Meanwhile, sponge iron offers from Raigarh remains unchanged at INR 26,100/t FoR Raipur with no fresh deals.

 

SteelMint billet index remains stable on active trades – 31 Dec

SteelMint daily billet index has been assessed at INR 39,550/t (0), exw Raipur on 31st December, 18:00 IST.

Total of about 3,000 t billet trades recorded today, as against 3,100 t on yesterday (i.e. 30th Dec).

  • 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)- Six 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, three trades were recorded at INR 39,600/t, one at INR 39,550/t, one at INR 39,500/t & one deal at INR 39,400/t. The average price of these six transactions was INR 39,542/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 39,604/t and given a 50% weightage in the final price calculation.

The final price for billet exw Raipur was at INR 39,573/t, rounded to INR 39,550/t exw.

For detailed methodology – Click here

T1: Trade
T2: Offer/Bid/Indicative

 

India: Bids fall by INR 450/t in recent Karnataka iron ore e-auction

Bids prices have fallen in recent iron ore e-auction conducted on 29th Dec’20 by private miners in Karnataka. Bid prices of iron ore fines (Fe 65%) offered by Vyasankere mines fell to INR 5,990/t against INR 6,440/t in last e-auction conducted on 18th Dec ’20. Similarly, bids for lump (Fe 65%) fell marginally to INR 5,770/t as compared to INR 5,790/t in the last auction. The auction fetched bids for 353,000t ore out of the total 495,455 t put to auction.

 

Turkey: Imported scrap market quiet as suppliers’ close shop for winter holidays

  • Buyers hope to resume after 4th Jan’21 with an offer price around $480-490/t
  • SteelMint’s assessment for USA origin HMS 1&2 (80:20) stands at $475/t CFR Turkey
  • Turkey-UK sign historic free trade agreement

Turkey- largest ferrous scrap importer remained quiet this week after several deals were concluded in the last couple of weeks. On account of winter holidays, major supplying countries are now closed for business and they may quote fresh offers after returning from holidays. Turkish buyers are expecting the market to resume after 4th Jan’21 with an increase in offer prices.

SteelMint has reported a last confirmed deal on 24th Dec’20 of a European bulk scrap cargo that has been sold to a Western Marmara based steel mill at $480/t CFR Turkey basis.

SteelMint’s assessment for USA origin HMS 1&2 (80:20) stands at $478/t CFR Turkey, up by $3 against last week.

Domestic scrap prices revise- On the strong currency exchange rate of the national currency, domestic scrap purchase prices have dropped recently by TRY 25-55/t ($4-8/mt), sources have reported to SteelMint. However, no negative trend was observed.

Turkish lira gain further against $– The Turkish lira has outperformed other emerging market currencies since last month, extending gains since the country’s central bank raised its key policy’s interest rate last week. Currently, Turkish Lira is being traded at TRY 7.42 against $1, as compared to TRY 7.86 recorded a month ago.

Turkish imported billet prices up by $20 w-o-w– Imported billet prices to Turkey have observed a sharp hike by $20 w-o-w and were traded at $600/t CFR.

Turkey-UK sign historic free trade agreement– Turkey and the UK signed a historic free trade agreement earlier this week, which would be into effect New Year’s Day, on 1st Jan’21. The new deal will be cover all industrial goods, according to the report. The UK is one of largest scrap suppliers to Turkey, as it exported 1.84 mn t of ferrous scrap to Turkey in the first 10 months of 2020, as per data maintained with SteelMint.