Indian domestic steel prices continue to exhibit weakening sentiments last week. The Indian Long Product Price Index ILPPI decreased by 114 points whereas Indian Flat Products Index IFPPI dipped by 36 points, slower than WEEK 45. The overall price index INDSPI decreased by 76 points.
| Class | 06-Nov | 13-Nov | Change | % |
| ILPPI | 5926 | 5812 | -114 | -1.9% |
| IFPPI | 7247 | 7211 | -36 | -0.5% |
| INDSPI | 6555 | 6479 | -76 | -1.2% |
ILPPI - Indian Long Product Price Index
IFPPI - Indian Flat Product Price Index
INDSPI - Indian Steel Price Index
Long Products
| Category | 06-Nov | 13-Nov | Change | % |
| PI - TMT | 5588 | 5495 | -93 | -1.7% |
| PI - WRC | 6492 | 6338 | -154 | -2.4% |
| PI - Angle | 5586 | 5502 | -84 | -1.5% |
| PI - Channel | 5634 | 5549 | -85 | -1.5% |
| PI - Joist | 5260 | 5206 | -54 | -1.0% |
PI - Product Index
Flat products
| Category | 06-Nov | 13-Nov | Change | % |
| PI - Narrow Plates | 6908 | 6868 | -40 | -0.6% |
| PI - Wide Plates | 7012 | 6985 | -28 | -0.4% |
| PI - Hot Rolled | 7107 | 7078 | -29 | -0.4% |
| PI - Cold Rolled | 7798 | 7758 | -40 | -0.5% |
| PI - Galvanized | 7674 | 7591 | -83 | -1.1% |
PI - Product Index
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1. Input material - Reels under downstream backlash
Input materials continued to exhibit negative trend across products and locations last week. As per market sources prices of pencil ingot is facing immense demand pressure, although firmed up a bit in the last few days of last week, may weaken further in the coming week .
Melting scrap
80:20
HMS
| Location | Change |
| Chennai | 0% |
| Kanpur | 0% |
| Kolkata | -2% |
| Mandi | 0% |
| Mumbai | -1% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
Alang
| Product | Size | Change |
| Plate cuttings | 1" | -1% |
| Ships | Mixed | -1% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
Pencil ingot
| Location | Change |
| Ahmedabad | 1% |
| Bhiwari | 0% |
| Durgapur | -1% |
| Ghaziabad | 0% |
| Hyderabad | -2% |
| Jaipur | -1% |
| Jamshedpur | -3% |
| Kanpur | 0% |
| Kolkata | 0% |
| Mandi | -1% |
| Mumbai | -1% |
| Muzzafarnagar | 0% |
| Nagpur | -1% |
| Raigarh | -3% |
| Raipur | -3% |
| Rourkela | -1% |
| Rudrapur | -1% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
Pig Iron
| Location | Change |
| Agra | -2% |
| Jallandhar | 0% |
| Kolkata | 0% |
| Raipur | 0% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
Sponge iron
| Location | Change |
| Bellary | -5% |
| Kolkata | -5% |
| Raigarh | -2% |
| Raipur | -5% |
| Rourkela | 0% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
2. Long products - Endless myriad of market movements
November 2009 heralds toughest phase for long product prices reminiscent of the peak recession in October 2008.
The movement of Indian Long Product Price Index ILPPI clearly reflects that the prices of long products in India are on the downhill since October 14th 2009 and have reduced by more than 8%. Despite the downward sentiments in last 2 months, Indian long product players have exhibited positive sentiments till October end but now they have succumbed to the market realities.
It seems that Indian long product market, devoid of demand, was backed by the pre Diwali optimism, culminating in accumulation of stocks in anticipation of demand ignition post festivals, but to the utter chagrin of market players, mirage vanished leaving aspirations in a limbo.
Oblivious to the realities in desperation sellers opted to keep their hopes pinned on a belated revival. However the inevitable slide soon commenced admonishing residual expectation with contempt. The prices of long products which started sliding in mid September have maintained its momentum.
| Class | 14-Sep | 10-Nov | Change | % |
| ILPPI | 6374 | 5812 | -562 | -8.82% |
ILPPI - Indian Long Product Price Index
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Market players attribute following factors for deepening pessimism in long products market
1. Liquidity crunch is playing pivotal role in declining demand for long products. On one side small and medium projects in reality sector have been gasping for credit, whereas on the hindsight major projects, running on pre recession sanctions are on the verge of completion.
2. Despite all the hype created by the government about stimulus for the construction industry, it still reels under the recessionary pandemic scuttling new projects as consumer confidence wanes.
Indian steel majors had a fairy run till mid October, as the latent demand from mega projects kept the inventories within manageable levels, keeping the prices afloat. With the progressive exhaustion of demand and inadequate new demand generation from the secondary sector prices crumbled under its own weight with mounting inventory.
The steel majors resorted to price cuts in an attempt to arrest the damage narrowing the price gap with secondary manufacturers. Imperiled by such daunting postures the secondary sector readjusted its pricing as a survival tactics triggering price war.
Rebars from secondary producers are being sold below INR 28,000 per tonne, inclusive of ED and VAT by secondary players in NCR Region. Further price cuts cannot be written off as they have to offload inventory before it starts cannibalizing residual margins.
A market player highlighted that “Normally, we could find some bright spots. But this time, the situation s grim as almost all the locations in India are exhibiting weak signals.”
The low offtake of pencil ingots is driving rebar prices down and it is reported that at one of the most decisive location viz., “Raipur” price has already plummeted to INR 19,000 per tonne plus taxes. Experts opine that further dip is inevitable in this week taking it below INR 18,000 per tonne.
Remarkably the lowest level of pencil ingot price in the last 2 years was reported during the last week of October 2008 and June July 2009 touching about INR 18,000 per tonne plus taxes at Raipur.
| Date | Price |
| 01-Jul | 34522 |
| 24-Oct | 18068 |
| 30-Mar | 19899 |
| 15-Jun | 19810 |
| 01-Jul | 19099 |
| 30-Jul | 17944 |
| 30-Jul | 17944 |
| 13-Nov | 19032 |
In per tonne
Exclusive of ED and VAT
If pencil ingot prices go down by further INR 1,000 per tonne in coming days, we shall witness lowest point after the boom setting new record and bursting the bubble of “All is well “ perpetuated by the state and steel manufacturers.
On the other hand, prices of domestic iron ore, backed by the export demand, and have climbed by 24% in last one month squeezing the margins of secondary producers. Shedding of flab is inevitable as some small players will be eased out bringing production and cost rationalization leading to demand supply match and recovery next month.
TMT
Fe 415
12mm
| Location | Change |
| Ahmedabad | -1% |
| Chennai | -3% |
| Delhi | -2% |
| Indore | -1% |
| Kanpur | 0% |
| Kolkata | -4% |
| Mandi | -1% |
| Mumbai | -1% |
| Raipur | 0% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
WRC
SWR14
5.5/6
| Location | Change |
| Chennai | -1% |
| Delhi | -6% |
| Kanpur | 0% |
| Kolkata | -3% |
| Raipur | -2% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
ANGL
Grade A
65X65X6
| Location | Change |
| Ahmedabad | -2% |
| Bangalore | 0% |
| Chennai | 0% |
| Delhi | -4% |
| Indore | -1% |
| Kanpur | -1% |
| Kolkata | -4% |
| Mandi | -1% |
| Mumbai | -1% |
| Raipur | -1% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
CNHL
Grade A
75/40
| Location | Change |
| Ahmedabad | -2% |
| Bangalore | 0% |
| Chennai | -2% |
| Delhi | -4% |
| Indore | -1% |
| Kanpur | -1% |
| Kolkata | -2% |
| Mandi | -1% |
| Mumbai | -1% |
| Raipur | -2% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
JSTI
Grade A
250X125
| Location | Change |
| Ahmedabad | -3% |
| Bangalore | 0% |
| Chennai | -1% |
| Delhi | -2% |
| Indore | -1% |
| Kanpur | -1% |
| Kolkata | -2% |
| Mandi | 0% |
| Mumbai | -1% |
| Raipur | -1% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
3. Flat products - Clueless amidst ambiguous international signals
The sublime move in Indian flat product market continues and is reflected by a statement of chairman SAIL on November 10th 2009 as mid month announcements for correction are quite rare. Mr SK Roongta at the India Economic Summit told reporters that “A small correction of INR 400 to INR 500 per tonne will happen soon for the flat steel products. Its rates should stabilize at marginally lower levels.”
Of late, due to paucity of demand, depressed price levels have become integral to the Indian steel market. The factors underlining this abject condition have been a favorite topic of introspection but it would be appropriate to delve into the activities of the suppliers and buyers post debacle rather than indulge in routine post mortem.
Flat product prices, a vital benchmark for the industrial demand and economic growth, have not shaken stupor for the last couple of months.
The much touted revival in steel market seems a misnomer in the backdrop of the abysmal market performance in the last couple of months. Need based buying is the prevailing approach as buyers prefer to wait for a more “sensible deal”.
Some murmurs of revival in auto and power sector have come as a welcome reprieve although its impact is limited due miniscule share of Indian majors in this value added segment. Demand from auto majors like Ashok Leyland, TATA Motors, Hyundai and Ford motors and project based demand from BHEL, L&T etc has proved to be savior to some extant.
Indian steel majors viz., JSW, Essar, TATA Steel, SAIL etc have resorted to empirical marketing strategies including volume based discount and hike in dealers margin.
Import has contributed its bit in the quagmire. It is learnt that about 15000 tonnes of CRC was imported at a landed price of INR 31000 per tonne. Ironically, even this quantity is facing liquidation problems due to lack of demand. About 9000 tonne is still left unsold after 1 month of arrival.
The situation looks all set for an extended dry spell with no significant activity in other consuming segments viz., tube making , fabrication ,furniture ,cable tray, drum making etc which is catered by the retail . The Chinese flat product prices have shown a token revival in the last fortnight but it cannot be ascertained as stable phenomenon with bipolar symptoms from Ukraine and Russia.
HRC
Tube
2.5x1250
| Location | Change |
| Ahmedabad | 0% |
| Bangalore | 0% |
| Delhi | -1% |
| Indore | 0% |
| Kolkata | 0% |
| Ludhiana | 0% |
| Mumbai | 0% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
Patra
| Location | Change |
| Delhi | -3% |
| Ludhiana | -1% |
| Mandi | -1% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
Plates
Grade A
8X1250/1500
| Location | Change |
| Chennai | -2% |
| Delhi | -1% |
| Kanpur | -1% |
| Kolkata | -1% |
| Mumbai | 0% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
Plates
GRADE B
12-20X2500
| Location | Change |
| Ahmedabad | 0% |
| Bangalore | 0% |
| Chennai | -1% |
| Delhi | -1% |
| Indore | 0% |
| Kanpur | 0% |
| Kolkata | 0% |
| Mumbai | 0% |
| Raipur | -1% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
CR
DSK
0.63x1000
| Location | Change |
| Ahmedabad | 0% |
| Chennai | -3% |
| Delhi | -1% |
| Kanpur | 0% |
| Kolkata | 0% |
| Mumbai | 0% |
| Pune | 0% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
GC
100Gms
0.4
| Location | Change |
| Bangalore | 0% |
| Chennai | 0% |
| Delhi | -2% |
| Kanpur | -2% |
| Kolkata | 0% |
| Mumbai | 0% |
Change is on November 13th as compared to November 6th 2009
Change is in INR per tonne
4. Indian Export Levels - Mills secede to Chinese provocation
The export levels for Indian galvanizers went down clearly last week mills on lower Chinese offers, although some mills, already booked for December production, maintained previous levels.
| Item | Grade | Size | Delivery | Change |
| HDG | 100Gms | 0.4 | FOB Mumbai | -20 |
| HDG | 100Gms | 0.58 | FOB Mumbai | -10 |
| HDG | 275Gms | 0.75 | FOB Mumbai | 0 |
| PLTS | Structural | 12-40x2.5 | FOB Vizag | 0 |
| PPGI | Standard RAL | 0.4 | FOB Mumbai | -20 |
Change is on November 13th as compared to November 6th 2009
Change is in USD per tonne
Indian Import Levels - China ups the ante
Chinese offers for HR firmed up further last week. HRC in SS 400 in 3mm to 12mm in 1250/1500 was being offered at USD 520 per tonne CFR levels up by USD 10 pr tonne from previous week.
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