Weekly round-up: IF-grade longs prices edge lower on lockdown uncertainties

In week 24 of CY’21, India’s induction furnace-based finished long steel market witnessed a decline in prices. Rebar prices fell by INR 200-1,000/t w-o-w in most of the major markets except Chennai.

Indian HRC prices remained stable this week due to sluggish demand and weak trading activity in the domestic market.

Iron ore and pellet

• SAIL conducted an auction on 11 Jun for 40,000 t of iron ore fines from its Dalli and Rajhara mines in Chhattisgarh. Bids were received for only 4,000 t at INR 3,580/t (loaded, including Royalty, DMF and NMET), according to market sources. The material put to auction was low-grade iron ore (Fe 55%, 57.8% and 51.1%).
• State PSU miner Odisha Mining Corporation (OMC) had scheduled an iron ore e-auction on 11 Jun from its Daitari mines for 24,000 t of iron ore fines (Fe 62-64%). The entire material received bids at INR 8,650-8,700/t against the base price set at INR 7,800/t, ex-mines (inclusive of royalty, DMF and NMET).
• Bellary-based iron ore pellet producers have reduced offers recently, as per SteelMint reports. Current pellet (Fe 63%) offers are at INR 13,500-14,000/t, exw-Bellary, compared to previous indications of INR 14,000-14,100/t, exw, assessed on 8 Jun. Also, deals of 8,000 t have been heard concluded at INR 13,400-13,500/t, exw, recently.
• SteelMint’s bi-weekly domestic pellet index, “PELLEX”, remained stable at INR 16,300/t, DAP Raipur, this week.
• SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index increased by $0.5/t w-o-w to $96.5/t, FoB east coast India, as per latest reports. India’s iron ore export sentiments witnessed marginal improvement due to the hike in global iron ore fines index.
• SteelMint’s Indian pellet export index (Fe 64% 3% Al, FoB east coast) has recorded a hike of around $7/t w-o-w and stands at $229/t.

Coal

• Australian coking coal prices remained rangebound this week with buyers refraining from seaborne procurement, as they awaited the result of a buy tender issued by an Indian steelmaker on 7 Jun.
• Overall sentiments remained bullish on healthy demand and potential supply tightness, with tradable limits for various premium coking coal brands remaining at elevated levels.
• Latest prices for the premium HCC grade are assessed at around $171.50/t, FOB Australia, $283.50/t, CNF China, and $197.30/t, on CNF India basis.
• South African RB1 prices increased by $2.60/t w-o-w to $115.70/t. Discounts for RB2 and RB3 were assessed at $18/t and $29/t respectively.
• South African RB2 portside prices remained largely stable this week at INR 7,950/t ex-Gangavaram.

Ferrous scrap

Imported scrap offers to India followed the global uptrend and, therefore, offers climbed $10-15/t week-on-week. A leading steel mill in India bought around 500 t of shredded scrap in containers recently, as per SteelMint reports. The deal was finalised for Europe-origin shredded scrap at around $520/t, CFR Mundra.
Market watchers are expecting prices to go up further and are opting to wait and watch; orders may start tricking in again next week.

• SteelMint’s assessment for UK/Europe-origin containerised shredded scrap stands at $525-530/t CFR Nhava Sheva, witnessing a hike of $10-15/t week-on-week.
• Fresh offers for UAE-origin HMS 1 are now at $495-500/t levels and HMS 1 & 2 (80:20) at $490/t CFR levels, registering a sharp hike of around $15-20/t w-o-w.

Ferro alloys

The overall market saw a mixed trend this week with domestic silico manganese prices surging on low stock levels. On the other hands, ferro chrome prices declined on low Chinese demand. Meanwhile, high grade manganese ore prices went up.

• Domestic silico manganese prices surged on low stocks and higher demand from the European market. However, many smelters in Malaysia suspended production due to increasing Covid cases triggering a hike in silico manganese prices. According to SteelMint assessment, the current market price of silico manganese is hovering around INR 98,000- 99,500/tonne (t) both in Raipur and Durgapur for 60-14 grade.
• Ferro chrome prices declined due to low demand from the Chinese market. The current price of ferro chrome (HC60) is at INR 93,000/t, exw-Jajpur. However, the demand outlook from South Korea and Japan remains optimistic.
• High grade manganese ore prices were up by 12% w-o-w for Jul’21 shipments. On the other hand, the prices of South African carbonate ore increased by 5% w-o-w due to ample demand for silico manganese in the international market.
• South African UG2 prices rose as a result of high electricity tariff and production cuts. Demand from the European markets remained active. SteelMint assessed the current market price of UG2 at $155/t, CNF China.
• Bhutanese ferro silicon smelters increased their prices and are currently offering at INR 126,500/t, exw-Bhutan, due to a rise in demand and labour shortage resulting in shrinking supply. Guwahati producers are ready to cater to inquiries at INR 138,000/t, exw, as they are booked for the month and have concluded their deals for small volumes.

Semi-finished

On a weekly basis, domestic sponge iron offers fell by INR 100-600/t in major locations with a particularly major drop observed in central India. Whereas billet prices declined in more or less the same ratio across India, in western India – Jalna and Ahmedabad – prices rose slightly by INR 200-400/t w-o-w.

• SAIL conducted an auction for 8,650 t of basic grade pig iron on 10 Jun from its Bhilai Steel Plant (BSP) in Chhattisgarh. The entire quantity offered was booked at a weighted average price of INR 38,350/t, exw.
• Tata Metaliks concluded a tender for one rake (around 2,200 t) of basic grade pig iron (Si 1-1.15%) at around INR 42,000/t FoR Phillaur, Punjab (due date was 8 Jun).
• SAIL conducted an auction for 9,700 t (four rakes) of basic grade pig iron on 9 Jun from its Bokaro Steel Plant in Jharkhand at which three rakes, 6,850 t, were booked at INR 37,500/t, exw.
• Indian sponge iron export offers remained stable this week following volatility in domestic prices. Fresh offers hovered at $480/t, CPT Benapole, equivalent to $500-505/t, CFR Chittagong, Bangladesh. However, no fresh deals were reported due to bids edging lower by $10-15/t compared to offers.
• Steel grade pig iron prices fluctuated by INR 200-700/t. While prices in the northern and eastern regions dropped by INR 400-700/t, a slight rise was recorded in central India.
• Induction grade (IF) billet export offers fell by $10/t w-o-w with fresh offers at around $595/t, exw Durgapur (equivalent to $620/t CPT Nepal). Meanwhile, fresh deals of blast furnace (BF) grade billet were reported at around $640-645/t, CPT Nepal, through an eastern India-based primary mill.

Finished long

India’s finished long steel prices produced via the induction furnace route trended down, and in most of the major markets rebar prices declined by INR 200-1,000/t w-o-w, except Chennai, SteelMint assessment shows.
Volatility in semi-finished steel prices, uncertain market trends and labour shortage at construction sites due to ongoing lockdown restrictions have resulted in limited demand and trade activity in the spot market. Finished long steel manufacturers reduced their offers on account of rising inventory at mills.

• Trade reference induction grade rebar steel prices of 10-25 mm size are assessed at INR 46,600-46,900/t, exw Raipur, and INR 48,100-48,500/t, exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers stood at INR 400-600/t and the trade reference price of 200 mm angle was at INR 49,700-50,100/t, exw Raipur.
• Trade discounts given by Raipur-based steel wire rod manufacturers stood at INR 500-700/t and the trade reference prices stood at INR 46,300-46,500/t, exw Raipur, and INR 46,500-46,700/t, exw Durgapur, for 5.5 mm.

Finished flat

Indian HRC prices remained largely stable this week due to sluggish demand and slow trade in the domestic market. Last week, Indian mills had sharply raised HRC and CRC prices by INR 3,000-4,000/t for Jun’21 deliveries to reduce the gap between landed import and domestic prices.

• Wide gap between trade and mill prices: This week, SteelMint’s benchmark prices for 2.5 mm HRC stood at a moderate range of INR 66,500-67,500/t (exy-Mumbai) against last week. On the other hand, major steelmakers offered HRC at INR 70,000-70,500/t (exy-Mumbai).
• Sales were very low in the trader’s market, as Mumbai- and Faridabad-based trader sources shared with SteelMint. Delayed purchases by customers due to elevated prices resulted in muted trading sentiments in the local markets.
• Buyers were hesitant in purchasing material at higher prices.
• Demand for coolers, fans and air conditioners fell in the summer season due to the state-specific lockdowns throughout the country. This resulted in a drop in sales of consumer durables in the first two months of this fiscal.
• Major automobile manufacturers such as Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors and Hero MotoCorp among others reported double-digit declines in sales in May’21

Near term outlook- Mills are likely to increase prices in the near term due to buoyant export premiums. However, it would be difficult to absorb further price hikes because of poor sales amid regional lockdowns.

Reference prices as on 12th June’21 (Week 24)
Prices are exw & exclusive of GST

Indian export reference prices as on 12th June’21
Prices in $/t
Source: SteelMint Research