Posted on 09 Jul 2024
Six months into 2024, Indian steel and raw material prices have notably cooled off, with raw material prices seeing a sharper decline than semi-finished and finished steel products, notes Kallanish.
Domestic low-grade (57% Fe) iron ore fines saw the steepest drop between January and end-June, down 32% to INR 2,900-3,000/tonne ($35-36) in Odisha, while export prices fell 29% to $62-63/t fob.
India, a major iron ore exporter, primarily to China, has seen dampened demand due to subdued steel demand in China's property sector.
Iron ore lump (Fe 60%) prices used by domestic steel mills have also dropped, by 10% to INR 5,700-5,800/t ($68-69).
Coking coal prices have significantly declined, by 23% to $270/t till end-June, due to ample supply from Australia amid steady demand from key buyer India.
Besides long-term contracts for coking coal, Indian mills are increasingly buying cheaper met coke from Indonesia and China for spot requirements.
India’s met coke imports rose by 7% on-year to 2.2 million tonnes during January-June.
In the metallics market, domestic direct reduced iron prices dropped by 4%, amid an increase in thermal coal prices, a key ingredient for DRI production.
Scrap prices, both imported and domestic, have remained largely stable at $385-390/t cfr Nhava Sheva and INR 33,000-33,500/t ($395-400) in Mumbai for HMS (80:20) grade scrap.
High freight charges due to geopolitical tensions have prevented any price drop in imported scrap, also allowing domestic sellers to maintain their prices.
Billet and rebar prices saw a marginal increase of 1-2% from January to June. Many secondary plants have opted for maintenance over significant price reductions amid subdued steel demand.
Domestic flat steel prices also saw a minor, 2% drop to INR 53,000-53,200/t ($635-637) due to weaker demand, particularly from the automotive sector, and weak export demand.
Looking ahead, the December quarter, typically the peak steel demand season in India, is expected to drive up demand and prices for both raw materials and finished steel.
Source:Kallanish
