BigMint: All global and Indian steel and raw material prices showed a y-o-y slide in the Indian financial year 2024-25 (FY'25) , reveals BigMint data. The highest decrease of 17% was seen in imported iron ore and the hot rolled coils (HRCs) space, which recorded a decline of 11-14% in the period under review.

Factors that impacted steel & raw material prices in FY'25

Iron ore

Indian ore falls amid slack steel demand: The domestic, BigMint iron ore index tracking the Fe62% fines fell 4% to INR 4,940/t in FY'25 from INR 5,150/t in FY'24. The reasons are not far to seek. Higher iron ore production and a poorly performing steel market weighed on domestic prices. India's iron ore production in April-February of FY'25 rose by 4.4% to 263 million tonne (mnt). Secondly, iron ore exports (including pellets) also fell sharply to 28 mnt in April 2024-February 2025 from 44 mnt in April 2023-February 2024 on weaker Chinese demand - because of lower steel output in this country.

Pellets also declined, tracking a dull finished steel market. The BigMint Pellet Index, DAP Raipur, slipped 1.5% y-o-y to INR 9,640/t (INR 9,500/t).

Global prices fall amid inventory glut: Iron ore, CNF Rizhao, China, imported from Australia, plunged 17% to $100/t against $120/t seen in the same period last fiscal. Global miners ramped up output while demand remained muted, leading to a glut in inventory. Iron ore inventories at Chinese ports rose to 143 mnt in CY'24, up from 123 mnt in CY'23, according to SteelHome data. China, the world's largest iron ore consumer and importer, recorded iron ore and pellet imports at 1,237 mnt in CY'24.

Coal

Coking coal down as domestic steel mills fight imports: In coking coal, the premium HCC, imported from Australia, CFR India, fell 5% to $230/t ($220/t) amid somewhat slack demand for domestic steel amid the imports onrush through the year.

Non-coking coal slips on higher domestic production: In non-coking, the RB3, 4800 NAR, portside ex-Gangavaram (INR 7,720/t) and CNF Gangavaram ($80/t) both remained unchanged y-o-y.

Higher domestic coal production weighed on prices. India's coal production crossed the 1 billion tonne-mark for the first time on higher production from the State-owned Coal India as well as captive and commercial miners. This explains the decrease of 9% y-o-y in non-coking coal imports which are estimated to drop to 167 mnt in FY'25.

Scrap

Domestic scrap under pressure from higher generation: HMS (80:20) scrap, DAP Mumbai dipped 5% to INR 33,330/t in FY'25 (INR 35,120/t) while imported shredded, CNF Nhava Sheva, also fell 5% to $400/t ($420/t).

Provisional data show that India's ferrous scrap generation is likely to rise by 7% y-o-y to 32 mnt compared with 30 mnt in the preceding fiscal, pressuring down prices. Boosting scrap generation through upgrading of domestic recycling infrastructure and bolstering end-of-life scrap processing are key components of the government's recycling policy. Scrap imports for steel production, on the other hand, are projected to drop sharply by 16% y-o-y to around 8.4 mnt in FY'25 on higher usage of domestic scrap because of cost viability and easier availability, and also due to decline in scrap exports from key supplying countries in an increased protectionist environment.

Turkiye shows little appetite amid low domestic rebar sales: At a global level, bulk HMS 80:20, CFR Turkiye, dipped 5% as well to $370/t ($390/t) amid lower demand in this country. Scrap demand from Turkiye has been slack amid muted rebar sales because of a global oversupply in the same. Secondly, with Europe not showing much appetite and its quotas having been exhausted almost immediately at the start of the year, Turkiye did not have much of a market here either. Thirdly, Turkiye seems to have a preference for the more cost-effective Asian billets.

Sponge iron

High sponge iron production weighs on prices: The sponge iron index for PDRI, ex-Raipur dropped 7% in FY'25 to INR 26,110/t (INR 28,020/t). India's sponge iron production is expected to reach approximately 55 mnt in FY'25. Estimates place India's DRI capacity at 62.6 mnt in FY'24, which is projected to rise by 10% y-o-y to 68.8 mnt by the end of FY'25. The higher output is putting pressure on pricing.

Longs

Billet Index slips 4% y-o-y on falling metallic prices: The BigMint Billet Index, ex-Raipur, slipped 4% to INR 40,330/t (INR 42,170/t) amid falling prices of competing metallics like scrap, sponge iron and pellets. Plus, demand for finished steel was under pressure.

Black Sea billets hit by less demand from Turkiye: Russian billets, FOB Black Sea, fell 6% to $470/t ($500/t) in this period under review. Major buyers like Turkiye and Egypt lessened their sourcing of Russian billets, pressured by a decline in demand for the same. Moreover, Turkiye showed a propensity for Asian billets, especially the cheaper Chinese material. Plus, the sanctions on Russia, including those on steel exports, impacted billet prices too.

Rebar prices supported by NHAI order, tight supplies: BF-grade rebars, ex-Mumbai, fell a mere 1% to INR 53,780/t (INR 54,300/t) while the IF-grade lost 4% to INR 48,220/t (INR 50,130/t). Wire rods were down by 4% to INR 43,760/t (INR 45,580/t). A key development that supported rebar prices was the NHAI circular late last fiscal that made quality control a far more stringent affair by replacing the "one-time source approval" system with "a multi-level checks and control mechanism", and that too, through only NHAI-verified vendors. Plus, supply tightness with many mills undertaking maintenance schedules, also supported rebar prices to an extent.

Turkiye rebar slips amid construction slowdown: Rebars, FOB Iskenderun, Turkiye, dipped 3% y-o-y in this period to $580/t ($600/t). Rebar sales fell in Turkiye because of weak domestic demand, increased competition from other exporting countries, and a general slowdown in the construction sector in many geographies.

Hot rolled coils

Indian domestic HRC prices challenged by imports: Hot rolled coils fared poorly across the globe, buffeted by Chinese dumping. Indian trade-level prices, ex-Mumbai, dropped 11% to INR 50,030/t in FY'25 (INR 56,000/t). Indian HRC domestic prices were hit by the imports deluge. Steel imports into India in FY'25, as per provisional data maintained with BigMint, are expected to rise to 10 mnt compared with 9 mnt in the preceding fiscal, an increase of 8% y-o-y.

China spoils global HRC party: Globally, export offers struggled against China's predatory pricing. The BigMint HRC export index, FOB east coast of India, eroded 13% to $520/t ($600/t). Indian export offers, CNF Antwerp, fell 13% to $610/t ($700/t). Japanese offers plunged 15% to $510/t ($600//t) FOB Tokyo while Russian offers lost ground by 14% to $510/t ($590/t) FOB Black Sea.

On the other hand, Chinese offers were at their lowest compared to others, falling 12% to $500/t (570/t) FOB Rizhao.

A nearly 30% y-o-y decline was seen in India's steel exports at 6.7 mnt in FY'25. Notably, Chinese steel exports crossed the 100-mnt mark at 110 mnt, a nine-year high, in 2024, which edged out Indian mills in terms of costs in key markets like the Middle East and Vietnam. Weak global demand amid oversupply also weighed on exports.

Outlook

Global and domestic steel and raw material prices may remain under pressure or move in a narrow range amid geopolitical tensions, US tariff pressures and a possibly sustaining trend of Chinese dumping.

In India's case, a safeguard duty may act as a buffer against imports, providing relief to larger domestic mills.

Source:BigMint