2021 steel360 india

2 | DECEMBER 2021 | STEEL360 INDIA

3 STEEL360 INDIA | DECEMBER 2021 |

EDITOR’S NOTE VOL X / ISSUE 06 / DECEMBER 2021

Indian steel prices see correction

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India's leading steel mills have announced a downward price correction.

What led to the revision?

Global steel prices have been correcting for around a month now, dragged

down by lower thermal and coking coal and met coke prices, exerting

pressure on domestic mills. Even though Chinese steel futures have

remained stable since early-November, prices are not likely to revise

upwards soon because of China’s production cuts and an overall lack of

demand as it, along with western countries, enter deep winter, a lean

construction period. Moreover, China is not encouraging too much of

carbon-spewing industrial activity ahead of the Winter Games.

Raw material prices have eased for Indian mills over November, putting

less pressure on production costs. The Australian premium low vol HCC

coking coal lost around $90/t over last fortnight while NMDC’s iron

ore lumps prices dropped to eight-month lows while global spot prices

of the benchmark Fe62% fines declined to $98/t levels from previous

stratospheric highs of $230/t. Import prospects are up with the drop in

global prices since landed costs are lower than domestic.

Our Cover Story focuses on the Indian Association’s current views and

outlook. Read the full interview with Alok Sahay, Secretary General and

Executive Head of ISA, inside.

Enjoy the read!

Madhumita Mookerji

[email protected]

COVER STORYby MADHUMITA MOOKERJI



COVER STORY

The Indian Steel Association (ISA) does not see much of billets exports happening from India in CY’22. Indian steel demand is expected to rise further by another 7% by end of CY’22 while

crude steel production is expected to touch 122 mn t levels by year-end, says Alok Sahay, the newly-appointed Secretary General and Executive Head of ISA, in a free-wheeling interview. Excerpts:

10-15% in India. The auto sector accounts for around 10% of steel demand, which would amount to around 1-2 mn t of lower demand than in a business-as- usual scenario.

Q. What is the demand and production scenario likely to be against the backdrop of the current pandemic-driven scenario? A. As per the Indian Steel Association (ISA) estimates, finished steel demand in India will be up by around 16.7% to reach around 104 million tonnes (mn t) by the end of CY’21 and by CY’22, will be at 111 million tonnes. Demand is sluggish but our projections are on course -- because a number of infra projects are in the pipeline and with the government’s emphasis on close project monitoring, the construction sector will drive steel demand growth. From the production perspective, we expect crude steel production to be around 120-122 mn t in CY’21. Net exports (exports minus imports) of semis will be around 4.5-5 mn t this calendar year and an additional net export of finished steel of around 7-7.5 mn t. In CY’22, we do not see much of crude steel being exported in the form of billets, which went to China this year. So we expect an estimated 124-125mn t of crude steel by end-CY’22.

Q. With the pandemic resurging globally, do you see any imminent threat on steel consumption? A. Europe is battling another wave of Covid-19. Austria has gone into a lockdown and there are protests in other parts of Europe against a lockdown. But a sizeable population worldwide and in India has been vaccinated hence we see this wave to be a bit short-lived and, in a macro aggregate sense, the impact will be limited.

Q. To what extent will the chip shortage impact flat steel consumption? A. The normal projection is that the chip shortage should get over by the first half of CY22. The Indian steel industry, having learnt its lessons, is exploring alternate places where the value chain is getting plugged without being overtly dependent on China. So, we feel, the chip shortage should get over by the middle of next year or at best take a few more months. In terms of its effect on demand, car production has fallen by

Q. How will China’s production curbs redefine global steel demand and supply? A. China has taken out most of its excess capacity. Right now, the game is about readjusting demand and production around the globe. We are not seeing the scenario of CY’14-16 when pockets of excess capacity got dumped at predatory prices and international steel prices had slumped. The current situation is more a realignment of production and demand globally. In China, because of environmental concerns, certain capacities have gone off the radar. China has resumed exporting only from last month. But it has come out with a clear priority of exporting only high-value steel. However, certain basic grades will also get exported. The point is, globally capacities having gone off, and steel being capital-intensive -- it cannot be switched on and off easily –there will have to be realignment of demand and supply throughout the globe. For instance, Vietnam’s steel exports have grown but its GDP has fallen in the last quarter. Such realignments are going to happen without offsetting the balance in any geography and thus not have any sharp impact on prices worldwide. Next year, quotas for Europe will open up and which will be a trigger for European buying.

Q. Will China’s output curbs and lesser buying impact pricing? A. China has never been a huge importer. In the pre-pandemic projections worldwide, China’s domestic consumption was supposed to go down. Because of the pandemic, an extraordinary situation was created because of which the Chinese government offered a lot of fiscal stimulus especially to the construction sector.This resulted in extra demand

Chinese government's fiscal stimulus, post-pandemic, resulted in extra demand that was fulfilled to an extent by Indian mills. Source: iStock


COVER STORY

emerging in China which would not have, under normal circumstances. This led China to source billets from other geographies. Indian mills capitalized on this by sending billets to China. India too was under a lockdown with domestic demand having dropped sharply, so billets and finished steel exports became important. But this was in the backdrop of an abnormal situation. Now, we are returning to the pre-pandemic levels when China was neither a major importer nor was India a major billets exporter to China. India’s steel predominantly meets domestic demand.

in the near term. Prices of hydrogen will have to reduce. There is still no clarity on the technology for transportation of hydrogen. There will be some low-hanging fruits which will be taken care of. For instance, all major steel plants in China or India have their captive power plants which could migrate to renewables, and offer more opportunities for recapturing heat or heat losses which go as waste. There will be more of PCI usage and efficiency gains.There is a bigger question of using hydrogen as a reducing agent. But that is still way off till cost of hydrogen comes down.

Q. How will de-carbonisation drive prices?

A. De-carbonisation and green steel will take a long time to come. Even after these do, there will be two markets -- green steel and non-green steel. The two markets will not compete with each other. The exports markets in USA and Europe perhaps will be more of the former initially. Gradually, the market of non-green steel will shrink and the basket of green steel products will expand but that will happen over a 10-year period. However, this will not be a major factor as China consumes 1 billion tonnes per year and, may be around 10% will turn green over the next few years. But, decarbonisation will have a major impact on prices

Q. How do you see iron ore prices behaving and where do you think the downward movement would settle at?

A. Iron ore prices internationally have been correcting and are expected to be in the range of $95-110/t in the medium term. Prices have weakened and would weaken further. As China’s iron ore consumption becomes normal, iron ore prices will also attain normalcy. If we compare with the last one year, steel prices and raw material costs have shot up which is not normal. But now things are normalising, including iron ore prices, China’s demand and consumption, hot metal output and even freight rates. If we talk about India’s iron ore prices, NMDC’s iron ore lumps prices have come down by 22% from Jun’21 to Oct’21

The chip shortage would lead to 1-2 mn t of lesser steel demand in India compared to a business-as-usual scenario. Source: iStock


and fines are down 27% in the same period. Prices are now expected to stabilise. The pandemic has increased uncertainty. Risk can be factored into the business model but not uncertainty. Therefore, the scenario is volatile. The abnormality seen in the last one year is also because uncertainty could not be priced in by most markets. Once the uncertainty decreases, normalcy will return faster. There will likely be more clarity by end of winter.

A. There are some micro level issues: Import duty on coking coal; Lesser Duty Rule; A lack of level playing field.

Long-term issues: For capacity to go beyond 200 mn t, financing issues will have to be resolved; Land issues; Environment issues. Raw material security.Q. The EU recently imposed a blanket ban on ferrous

scrap exports. What kind of an impact will that likely have on Indian buyers?

A. Scrap prices will move up a bit. The reason is, as environmental norms have become more and more important, there will be lesser use of DRI which means scrap usage will increase. Therefore, demand for scrap is only likely to go up. India imports around 5-7 mn t of scrap per annum. With the domestic scrappage policy taking shape, several scrapping yards are slated to come up. The excess demand will be initially taken care of domestically and then India’s scrap imports will moderate to less than 5 mn t.

Q. What are the key challenges before the Indian steel sector and where do you see the opportunities opening up?

Q. Are auctions a viable option going forward for iron ore as a means to raw material security?

A. It is very early days to say that the auctions did not work out. These are issues which will eventually get resolved. Initially, there was a scramble for iron ore security. Eventually, premiums will not be so high. There is still a gap between demand and supply. There are mines that have gone off the radar, while others have not come up for auctions. Once these do, premiums will come down. We should wait for the auction process to settle down before giving a fair view on how it should move forward. But auctions are an irreversible route to raw material security.

COVER STORY

EU's scrap ban will not impact India much. The excess demand will be initially taken care of domestically and then India’s scrap imports will moderate to less than 5 mn t. Source: iStock

SCRAP

I-BEAM

MS CHANNEL

WIRE ROD

*HR COIL

*CR COIL

FERRO MANGANESE

SILICO MANGANESE

FERRO SILICON

FERRO CHROME

PELLET

INGOT

MS BILLET

PIG IRON

REBAR

MS ANGLE

SPONGE IRON

Market STALKERGRADE/SIZE Prices as on

20.11.2021Prices as on 25.10.2021

LOCATION Grade/Size Prices as on20.11.2021

Prices as on 25.10.2021

LOCATION

Prices are ex-Work (Stock Yard)# Prices in USD/MT | All Prices Are Indicative and Basic in INR/MT & Prices Excluding GST @ 18%

VOL X ISSUE 06 DECEMBER 2021

Alang HMS(80:20)

Chennai HMS(80:20)

Durgapur HMS(80:20)

Mandi HMS(80:20)

Mumbai HMS(80:20)

Raipur HMS(80:20)

CNF Turkey# HMS(80:20),US

Barbil 6-20mm, Fe 63%

Bellary 6-20mm, Fe 63%

Durgapur 6-20mm, Fe 63%

Raipur 6-20mm, Fe 63%

Bellary 80+/-1 FeM

Durgapur 78+/-1 FeM

Raipur 82+/-1 FeM

Rourkela 80 FeM

Durgapur 3.5*4.5, Commercial

Hyderabad 3.5*4.5, Commercial

Mandi Gobindgarh 3.5*4.5, Commercial

Mumbai 3.5*4.5, Commercial

Raipur 3.5*4.5, Commercial

Chennai 100*100, Commercial

Mandi Gobindgarh 100*100, Commercial

Mumbai 100*100, Commercial

Raipur 100*100, Commercial

Rourkela 100*100, Commercial

Durgapur Steel Grade

Raipur Steel Grade

Kharagpur Foundary Grade

Ludhiana Foundary Grade

FoB India# Steel Grade

Ahmedabad 12-25 mm

Chennai 12-25 mm

Delhi 12-25 mm

Durgapur 12-25 mm

Hyderabad 12-25 mm

Mumbai 12-25 mm

Raipur 12-25 mm

Jalna 12-25 mm

Ahmedabad 40*40*5

Durgapur 40*40*5

Hyderabad 40*40*5

Mumbai 40*40*5

Raipur 40*50*5

Ahmedabad 150*75

Durgapur 125*70

Hyderabad 125*70

Mumbai 125*70

Raipur 125*70

Ahmedabad 100*50*6

Durgapur 100*50*6

Hyderabad 100*50*6

Mumbai 100*50*6

Raipur 100*50*6

Durgapur 5.5 mm

Raipur 5.5 mm

Ludhiana 2.5-8 mm

FOB China# 3-12 mm SS400

Ahmedabad 0.9 mm

Ludhiana 0.9 mm

Durgapur 25-150 mm, 60-14

Raipur 60-14

Durgapur HC70%

Raipur HC70%

Guwahati HC 70-75%

Jajpur HC 60%

38,100-38,500 39,100-39,500

34,600-35,000 37,300-37,700

38,300-38,700 41,100-41,500

35,600-36,000 36,200-36,600

36,900-37,300 36,900-37,300

36,600-37,000 40,900-41,300

494-498 503-507

10,200-10,400 12,725-12,925

11,000-11,200 12,975-13,175

10,400-10,600 12,775-12,975

11,375-11,575 13,750-13,950

29,600-30,000 33,950-34,350

29,400-29,800 33,000-33,400

32,700-33,100 36,500-36,900

30,700-31,100 34,950-35,350

41,900-42,300 46,450-46,850

42,400-42,800 46,400-46,800

44,500-44,900 46,600-47,000

44,600-45,000 46,100-46,500

41,300-41,700 45,300-45,700

43,300-43,700 48,800-49,200

44,650-45,050 46,800-47,200

45,100-45,500 46,600-47,000

41,850-42,250 45,900-46,300

41,300-41,700 45,100-45,500

40,800-41,200 45,600-46,000

40,500-40,900 44,600-45,000

45,800-46,200 48,000-48,400

45,800-46,200 46,800-47,200

516-520 518-522

51,000-51,400 53,700-54,100

50,300-50,700 55,600-56,000

48,500-48,900 53,600-54,000

45,600-46,000 49,300-49,700

47,800-48,200 51,300-51,700

49,700-50,100 52,600-53,000

45,800-46,200 49,800-50,200

50,400-50,800 51,500-51,900

50,200-50,600 52,100-52,500

47,200-47,600 50,800-51,200

49,100-49,500 53,300-53,700

52,000-52,400 54,800-55,200

47,600-48,000 51,600-52,000

51,000-51,400 52,900-53,300

48,700-49,100 50,900-51,300

49,200-49,600 53,400-53,800

53,000-53,400 56,000-56,400

50,000-50,400 53,300-53,700

50,700-51,100 52,600-53,000

47,200-47,600 50,800-51,200

48,700-49,100 52,900-53,300

52,600-53,000 55,600-56,000

46,700-47,100 50,700-51,100

45,800-46,200 49,600-50,000

45,700-46,100 49,800-50,200

67,800-68,200 69,550-69,950

783-787 978-982

76,200-76,600 77,800-78,200

75,600-76,000 76,900-77,300

95,085-95,485 127,100-127,500

95,425-95,825 133,950-134,350

106,050-106,450 134,800-135,200

106,300-106,700 136,800-137,200

177,300-177,700 283,475-283,875

117,750-118,150 127,475-127,875



SCRAP

I-BEAM

MS CHANNEL

WIRE ROD

*HR COIL

*CR COIL

FERRO MANGANESE

SILICO MANGANESE

FERRO SILICON

FERRO CHROME

PELLET

INGOT

MS BILLET

PIG IRON

REBAR

MS ANGLE

SPONGE IRON

Market STALKERGRADE/SIZE Prices as on

20.11.2021Prices as on 25.10.2021

LOCATION Grade/Size Prices as on20.11.2021

Prices as on 25.10.2021

LOCATION

Prices are ex-Work (Stock Yard)# Prices in USD/MT | All Prices Are Indicative and Basic in INR/MT & Prices Excluding GST @ 18%

VOL X ISSUE 06 DECEMBER 2021

Alang HMS(80:20)

Chennai HMS(80:20)

Durgapur HMS(80:20)

Mandi HMS(80:20)

Mumbai HMS(80:20)

Raipur HMS(80:20)

CNF Turkey# HMS(80:20),US

Barbil 6-20mm, Fe 63%

Bellary 6-20mm, Fe 63%

Durgapur 6-20mm, Fe 63%

Raipur 6-20mm, Fe 63%

Bellary 80+/-1 FeM

Durgapur 78+/-1 FeM

Raipur 82+/-1 FeM

Rourkela 80 FeM

Durgapur 3.5*4.5, Commercial

Hyderabad 3.5*4.5, Commercial

Mandi Gobindgarh 3.5*4.5, Commercial

Mumbai 3.5*4.5, Commercial

Raipur 3.5*4.5, Commercial

Chennai 100*100, Commercial

Mandi Gobindgarh 100*100, Commercial

Mumbai 100*100, Commercial

Raipur 100*100, Commercial

Rourkela 100*100, Commercial

Durgapur Steel Grade

Raipur Steel Grade

Kharagpur Foundary Grade

Ludhiana Foundary Grade

FoB India# Steel Grade

Ahmedabad 12-25 mm

Chennai 12-25 mm

Delhi 12-25 mm

Durgapur 12-25 mm

Hyderabad 12-25 mm

Mumbai 12-25 mm

Raipur 12-25 mm

Jalna 12-25 mm

Ahmedabad 40*40*5

Durgapur 40*40*5

Hyderabad 40*40*5

Mumbai 40*40*5

Raipur 40*50*5

Ahmedabad 150*75

Durgapur 125*70

Hyderabad 125*70

Mumbai 125*70

Raipur 125*70

Ahmedabad 100*50*6

Durgapur 100*50*6

Hyderabad 100*50*6

Mumbai 100*50*6

Raipur 100*50*6

Durgapur 5.5 mm

Raipur 5.5 mm

Ludhiana 2.5-8 mm

FOB China# 3-12 mm SS400

Ahmedabad 0.9 mm

Ludhiana 0.9 mm

Durgapur 25-150 mm, 60-14

Raipur 60-14

Durgapur HC70%

Raipur HC70%

Guwahati HC 70-75%

Jajpur HC 60%

38,100-38,500 39,100-39,500

34,600-35,000 37,300-37,700

38,300-38,700 41,100-41,500

35,600-36,000 36,200-36,600

36,900-37,300 36,900-37,300

36,600-37,000 40,900-41,300

494-498 503-507

10,200-10,400 12,725-12,925

11,000-11,200 12,975-13,175

10,400-10,600 12,775-12,975

11,375-11,575 13,750-13,950

29,600-30,000 33,950-34,350

29,400-29,800 33,000-33,400

32,700-33,100 36,500-36,900

30,700-31,100 34,950-35,350

41,900-42,300 46,450-46,850

42,400-42,800 46,400-46,800

44,500-44,900 46,600-47,000

44,600-45,000 46,100-46,500

41,300-41,700 45,300-45,700

43,300-43,700 48,800-49,200

44,650-45,050 46,800-47,200

45,100-45,500 46,600-47,000

41,850-42,250 45,900-46,300

41,300-41,700 45,100-45,500

40,800-41,200 45,600-46,000

40,500-40,900 44,600-45,000

45,800-46,200 48,000-48,400

45,800-46,200 46,800-47,200

516-520 518-522

51,000-51,400 53,700-54,100

50,300-50,700 55,600-56,000

48,500-48,900 53,600-54,000

45,600-46,000 49,300-49,700

47,800-48,200 51,300-51,700

49,700-50,100 52,600-53,000

45,800-46,200 49,800-50,200

50,400-50,800 51,500-51,900

50,200-50,600 52,100-52,500

47,200-47,600 50,800-51,200

49,100-49,500 53,300-53,700

52,000-52,400 54,800-55,200

47,600-48,000 51,600-52,000

51,000-51,400 52,900-53,300

48,700-49,100 50,900-51,300

49,200-49,600 53,400-53,800

53,000-53,400 56,000-56,400

50,000-50,400 53,300-53,700

50,700-51,100 52,600-53,000

47,200-47,600 50,800-51,200

48,700-49,100 52,900-53,300

52,600-53,000 55,600-56,000

46,700-47,100 50,700-51,100

45,800-46,200 49,600-50,000

45,700-46,100 49,800-50,200

67,800-68,200 69,550-69,950

783-787 978-982

76,200-76,600 77,800-78,200

75,600-76,000 76,900-77,300

95,085-95,485 127,100-127,500

95,425-95,825 133,950-134,350

106,050-106,450 134,800-135,200

106,300-106,700 136,800-137,200

177,300-177,700 283,475-283,875

117,750-118,150 127,475-127,875

Quantity in mt | Provisional Data | Source: Customs, JPC, SteelMint

STATISTICS VOL X ISSUE 06 DECEMBER 2021

INDIA IRON ORE EXPORT IN OCTO�ER� ��

IMPORTING COUNTRY INDIAN PORT

INDIA IRON ORE IMPORT IN OCTO�ER� ��INDIAN PORT

INDIA COAL IMPORT IN OCTO�ER� ��

EXPORTING COUNTRY INDIAN PORT

INDIA FLAT STEEL IMPORT IN OCTO�ER� ��

EXPORTING COUNTRY INDIAN PORT

INDIA MANGANESE ORE IMPORT IN OCTO�ER� ��EXPORTING COUNTRY INDIAN PORT

SEPTEMBER'21

TOTAL

KANDLA

KRISHNAPATNAM

PARADEEP

OCTOBER'21

EXPORTING COUNTRY

SOUTH AFRICA

AUSTRALIA

FINLAND

TOTAL

-

-

-

-

-

-

-

- TOTAL

-

-

-

-

-

-

-

-

TOTAL

SEPTEMBER'21OCTOBER'21

SEPTEMBER'21OCTOBER'21 SEPTEMBER'21OCTOBER'21




CHINA 312,996 273,264 MORMUGAO 127,300 57,500

QATAR 15,000 - PARADEEP 108,196 159,564

SOUTH KOREA - - GOPALPUR 77,500 -

INDONESIA - - KANDLA 15,000 -

OTHERS - - OTHERS 56,200

327,996 273,264 327,996 273,264

-

AUSTRALIA 6,250,612 5,926,179 GANGAVARAM 1,825,865 1,252,703

INDONESIA 5,441,501 4,617,882 DHAMRA 1,664,655 1,124,036

SOUTH AFRICA 2,089,659 1,561,947 PARADEEP 1,647,156 1,021,721

UNITED STATES 909,786 701,141 VISHAKHAPATNAM 1,302,592 835,544

OTHERS 2,090,241 1,793,735 OTHERS 10,341,531 10,366,880

TOTAL 16,781,799 14,600,884 TOTAL 16,781,799 14,600,884

SOUTH KOREA 143,086 212,573 MUMBAI 104,804 116,237

JAPAN 76,258 32,476 CHENNAI 58,029 86,940

CHINA 24,775 15,244 MUNDRA 50,208 39,346

GERMANY 4,586 8,243 JNPT 21,045 18,558

OTHERS 16,993 59,472 OTHERS 31,612 66,925

TOTAL 265,698 328,008 TOTAL 265,698 328,008

SOUTH AFRICA 323,482 222,107 VISHAKHAPATNAM 292,679 181,890

GABON 230,355 136,104 KOLKATA 272,224 188,266

AUSTRALIA 46,920 53,343 DHAMRA 48,677 45,926

BRAZIL 6,049 4,817 HAZIRA 422 446

OTHERS 7,273 7,052 OTHERS 77 6,895

TOTAL 614,079 423,424 TOTAL 614,079 423,424

2021 steel360 india

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