Metals & Mining - Weekly Update - Domestic steel pricing weakness continues by Prabhudas Lilladhar Ltd
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* Indian Benchmark HRC price slumped below the Rs 54,000/t mark to Rs 53,800/t. (-0.4% WoW). The spot spreads have declined 1% WoW to Rs 19,980/t led by fall in HRC prices as RM prices remained largely stable.
* Chinese and European prices remained flat sequentially at USD 565/t and USD 620/t. The spot spreads improved 4.8%/3% for China and Europe respectively to USD 97/t and US USD 152/t as iron ore prices fell sharply.
* Coking coal prices declined 0.2% WoW to USD 315/t while Chinese iron ore prices declined 2% WoW to USD 127/t post re-opening of markets. Today it declined further to USD122/t.
* Stainless steel prices increased 1.7% WoW to USD 176k/t after being flat for at Rs173k/t for a month.
* Domestic steel demand improved in January as imports have subsided; however, pricing still remains muted. Primary steel players are expected to take calibrated price hikes in near term in order to push rising cost curve. Steel companies are eyeing export markets as Indian HRC continue to trade at discount on import parity basis. A cut in benchmark lending rate by China is expected to boost housing sector. Top picks: JSP, JDSL & HNDL.
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