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PL Sector Report: Metals & Mining - Weekly Update – Domestic steel prices inched up a bit
Metals & Mining - Tushar Chaudhari - Research Analyst, Prabhudas Lilladher Pvt. Ltd.
Metals & Mining - Tushar Chaudhari - Research Analyst, Prabhudas Lilladher Pvt. Ltd.
Weekly Update – Domestic steel prices inched up a bit
§ Indian benchmark HRC prices (ex-Mumbai) increased 0.5% WoW to Rs 55,300/t from Rs 55,050/t. Domestic spot spread declined to Rs 19,843/t from Rs 20,079/t WoW on rising coking coal prices.
§ European and Chinese HRC prices remained flat WoW at USD 630/t and USD 575/t respectively. Spot spreads for Europe and China narrowed to USD 143/t and USD 88/t respectively. Coking coal prices increased ~2% WoW to USD 329/t while iron ore fines prices (CNF Rizhao) remained flat WoW at USD 132/t.
§ On import parity basis, domestic discount declined to ~Rs 950/t WoW as prices started inching up. Indian steel imports hit 7-year high at 7mt (+43% YoY) which should moderate in coming months as domestic premiums eroded.
§ Base metals prices declined 2-5% WoW. Aluminium prices remain subdued on higher global output (up 4% YoY to 6.1mt in October).
§ As per SteelMint survey, Chinese HRC prices have potential for further uptick in the near term; on firm demand from end user industries and depleting stocks. We believe domestic steel companies should start taking price hikes gradually to set-off the impact of rising input prices. Top Picks: HNDL, JSP and JDSL.
Exhibit 1: Weekly Metal Prices
| Particulars | Metric | CMP | Weekly performance | Monthly performance | ||
| 05-Dec-23 | 28-Nov-23 | WoW gr. (%) | 01-Nov-23 | MoM gr. (%) | ||
| HRC, ex-Mumbai (250 grade 2.5-8mm) | Rs/t | 55,300 | 55,050 | 0.5 | 55,950 | -1.2 |
| HRC, CNF West Europe | USD/t | 630 | 630 | - | 590 | 6.8 |
| HRC, FOB Rizhao, China | USD/t | 575 | 575 | - | 530 | 8.5 |
| Rebar Ex- Mumbai, 12-32mm, BF Route | Rs/t | 55,000 | 55,000 | - | 56,400 | -2.5 |
| Stainless Steel 304 Grade, HRC ex-Mumbai | Rs/t | 1,90,000 | 1,90,000 | - | 1,99,000 | -4.5 |
| Sponge Iron, DRCLO, ex-Raipur, India | Rs/t | 30,200 | 30,617 | -1.4 | 31,867 | -5.2 |
| Pig Iron, ex-Durgapur, India (Steel grade) | Rs/t | 37,250 | 37,117 | 0.4 | 37,583 | -0.9 |
| Iron Ore Fines Fe 62%, CNF Rizhao (Aus) | USD/t | 132 | 132 | - | 124 | 6.6 |
| Iron Ore Lumps Fe 63% Odisha, India | Rs/t | 7,200 | 7,200 | - | 7,200 | - |
| Coking Coal, FOB Hay Point, Australia | USD/t | 329 | 323 | 1.6 | 350 | -6.1 |
| Thermal Coal, FOB Richards Bay, SA RB1 6000 | USD/t | 108 | 112 | -3.9 | 124 | -12.7 |
| Melting Scrap, CFR Nhava Sheva, Shredded | USD/t | 410 | 411 | -0.1 | 398 | 3.1 |
| LME Aluminium Spot | USD/t | 2,122 | 2,174 | -2.4 | 2,217 | -4.3 |
| Alumina Spot 99% in East China | USD/t | 412 | 413 | -0.1 | 408 | 1 |
| LME Copper Spot | USD/t | 8,253 | 8,388 | -1.6 | 8,030 | 2.8 |
| LME Nickel Spot | USD/t | 15,940 | 16,539 | -3.6 | 17,789 | -10.4 |
| LME Zinc Spot | USD/t | 2,414 | 2,537 | -4.8 | 2,490 | -3.1 |
| LME Lead Spot | USD/t | 2,020 | 2,126 | -5 | 2,095 | -3.6 |
| Exchange Rate | USD/INR | 83.39 | 83.34 | -0.1 | 83.29 | -0.1 |
