Indian steel export volumes in Mar ’21 hit 1.8-1.9 mn t amid higher global prices, leading the mills to liquidate their stocks at lucrative margins. Sources indicate that April’s export volumes may not be very high on account of healthy domestic demand. However, now that India is experiencing a devastating second Covid-19 wave that is leading to regional lockdowns, steel mills may once again explore overseas market in the month of May and Jun ’21 to liquidate their stocks at healthy margins.
Indian mills raised their steel exports by 61% to 18.92 mn t in FY ’21, as per SteelMint data. The items exported the most last fiscal were finished flats (10.40 mn t), followed by billets (7.25 mn t) with finished longs bringing up the rear at 1.27 mn t. Among the Indian mills, JSW Steel led with 4.94 mn t of exports in FY ’21, followed by the Tata Group with 3.75 mn t and JSPL with 2.11 mn t while SAIL with 1.58 mn t and others followed.
SteelMint’s bi-weekly domestic pellet index “PELLEX ” continues to remain stable at INR 14,550/t DAP Raipur. Two deals total quantity of 8,000 t pellet have been reported in this publishing window at INR 14,200-14,400/t DAP, Raipur.
Raipur based pellet makers have kept the offers stable at INR 14,500- 15,000/t exw for Fe 63/62.5% grade. Higher iron ore prices have kept pellet offers supported apart from higher pellet export prices.
NMDC’s iron ore auction from Chhattisgarh mines conducted today fetched active participation. Offered quantity comprised 147,000 t of fines, 16,800 t DR-CLO and rest 16,800 comprised of ROM. According to market sources report to SteelMint, the auction received aggressive response with bids moving up by around INR 280/t in fines, INR 930/t in DR-CLO, INR 300/t in ROM and INR 600/t in lump over the set base price. Tighter availability of high-grade ore in Odisha has resulted in increased bids in today’s auction.
However, Pellet sponge (P-DRI) prices in Raipur have decreased by around INR 500/t w-o-w to INR 28,750/t exw today. On a daily basis also, prices have moved down marginally by around INR 50/t.
Indian pellet market overview-:
India pellet prices across the regions remained stable except Jharsuguda witnessing hike by around INR 200/t in this publishing window. Pellet trades remained limited owing to lock-down restrictions. However, in Southern India-based, pellet prices have come down by INR 150/t w-o-w.
Rationale – PELLEX has been derived using data points: i.e., trades, offers and bid. You can download the detailed methodology by clicking on this link Click here
- Two deals were reported in this publishing window and all were considered in the index calculation and kept the weightage 50% weightage.
- Six firm offers were reported and three were offered from Raipur and the rest offers from outside Raipur. All were taken for price calculation and given a weightage of 50%.
- Two firm bids also received in this publishing window however only one was considered for price calculation in this index.
Region-wise pellet offers and deals:
Global scrap prices have maintained its momentum northwards. Following the global price trends, Indian imported scrap prices too, registered a hike of $10 in recently concluded trades this week. The trade has been witnessed after a gap of a couple of weeks. Meanwhile, trades in Pakistan continued to happen at increased offers, SteelMint learnt from reliable sources.
Imported scrap prices in Turkey have moved up by $8/t in a deal concluded by Baltic origin, credible sources have confirmed to SteelMint. A Mediterranean region-based steel mill has booked a mixed cargo comprising 23,500t HMS (80:20) at $440/t CFR Turkey basis. In another deal heard, East Marmara region-based mill booked a cargo comprising of HMS (80:20) and bonus. The booked cargo is likely to be shipped in the mid of June.
“Very few suppliers are active in the markets and yards are holding back offers on expectations of further price hike in the coming days”, shared a trade source.
Recent trades & offers:
- Containerised shredded scrap deals have been concluded at $470/t CFR Nhava Sheva. Fresh offers in containers have moved up significantly by $10/t to $480-485/t CFR levels w-o-w
- Offers for Dubai origin HMS 1 in containers are at $450/t CFR
- HMS from UK is now being offered at $450-455/t CFR levels.
Domestic scrap prices rise on supply tightness: Melting prices remain range-bound in near term. Trade participants remained cautious amidst uncertainty in future market outlook and inadequate future bookings due to ongoing lockdown restrictions. SteelMint’s assessment for HMS in Western India is at INR 34,300/t DAP Mumbai, up by INR 800/t, and the same is INR 34,400/t DAP level for Jalna, sharply up by INR 1,700/t both on weekly basis. As per plants, sentiments have turned optimistic. The reason behind this is a supply shortage of scrap due to lockdown restrictions.
Indian rebar prices remain supportive, trades slow down: Induction grade rebar prices remained supportive in most of the major markets in India. Production cut by mills due to shortage of Oxygen supply and higher cost of billet propelled the prices. Manufacturers, in some locations also made slight adjustments in the discount offer as per market requirement. However, demand and trade activities are still dull in the spot market.
According to SteelMint’s assessment the induction furnace (IF) grade rebar price in Mumbai stands at INR 49,000/t exw, down by INR 100/t w-o-w.
SteelMint’s benchmark sponge iron (P-DRI) price dropped sharply by INR 500/t w-o-w to INR 28,750/t ($388), exw Raipur, Central India.
Outlook: Market participants expect offers to move up further in the near term on limited offers. Increased freight rates and tighter domestic scrap availability on liquid oxygen supply constraints will be the key factors.
China accounted for 28% of total steel exports from India aggregating to 5.8 mnt in FY ’21. The demand for semi-finished steel products in China increased towards the year-end amid blast furnace, lime kiln and sintering restrictions since Sep ’21.
The demand for flats was fuelled by a kick-start to China’s automobile sector and billets were fed into its infra projects. The billet exports volumes thus have spurted by 153%, reinforcing that China’s economic recovery was led by investments in infra projects.
Other major export destinations were Vietnam at 2.8 mn t, Nepal at 1.89 mn t and Italy at 1.28 mn t in FY ’21.
Indonesian ICI4 index for 4200 GAR grade coal has moved up to $52.2/t FoB basis against $50.3/t last week. Indonesian coal prices have been rallying since last two months amid strong demand from China and supply tightness from Indonesia due to ongoing rainy season there. However, demand from India continued to hover at low ebbs amid rising COVID cases.
India’s largest iron ore miner – NMDC conducted iron ore e-auctions today for 231,000t iron ore from its Chhattisgarh mines, out of which 180,600 t from its Bacheli mines and 50,400 t from Kirandul mines. According to market sources report to SteelMint, the auction received aggressive response with bids moving up by around INR 280/t in fines, INR 930/t in DR-CLO, INR 300/t in ROM and INR 600/t in lump over the set base price. Tighter availability of high grade ore in Odisha has resulted in increased bids in today’s auction.
Steel melting scrap prices remained supportive in most of the scrap markets except in the Western region based Alang market where it corrected slightly by INR 300/t owing to less future bookings in semi-finished steel along with curtailed production. Near term trade activities may remain slightly affected due to lockdown, trade participants told SteelMint.
MOIL, India’s largest manganese ore miner has decreased prices of all grades of Manganese ore by 5% on prevailing prices since 01.04.2021. Despite higher silicomanganese prices MOIL decided to reduce the ore prices to maintain price parity with the international prices. South African carbonate ore prices fell by around 7% since the start of the month.
Khouzestan Steel Company (KSC), Iran’s leading steel exporter, reported having sold 30,000 t billets through a tender. According to SteelMint sources, the mill concluded the tender at $620/t, FoB for Jun ’21 shipments with China as likely destination. The mill also managed to conclude its 30,000 t slab tender floated at $750/t, FoB. Iranian billet export prices have increased by $20 against the previous deal concluded a couple of days back.