Weekly round-up: Indian steel sees mixed trend in sluggish market

Domestic billet offers rose in the range of INR 200-1,500/tonne across regions with a major rise of INR 1,400-1,500/t reported in western India. The sponge iron market observed rise in prices by INR 200-800/t on fluctuating demand.

The induction furnace-route finished long steels market witnessed a mixed trend during the week with prices fluctuating by INR 100-1,000/t w-o-w.

Indian HRC trade prices declined sharply by INR 1,500-2,000/t due to delay in procurements from traders as they are expecting a further correction in HRC prices.

Iron ore and pellets

• India’s largest government-owned merchant iron ore miner, NMDC, cut iron ore prices for Jul’21 deliveries by INR 200-230/t ($3/t).
• State-owned miner Odisha Mining Corporation (OMC) had scheduled an iron ore fines e-auction on 8 Jul’21. The bids dropped by INR 1,100-1,950/tonne (t) compared to the May’21 auction bids.
• SteelMint’s bi-weekly domestic pellet index, PELLEX, fell further by INR 150/t to INR 15,550/t DAP Raipur. Lower bids on falling steel margins and a stream of competitive offers to Raipur buyers from producers based outside the state capital continue to keep pellet offers under pressure.
• SteelMint’s assessment for Bellary iron ore pellets (Fe 63%) currently stands at INR 12,000/t, stable against the previous assessment on 6 Jul’21. Bellary pellet prices are hovering at three-month low levels, as per records.
• SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) has recorded a rise of around $17/t w-o-w and currently stands at $246/t.
• SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) increased marginally by $2/t w-o-w to $87/t FoB east coast India.

Ferrous scrap

The imported scrap market in India remained quiet this week owing to disparities in bids and offers. No major bookings were heard throughout the week. Offers remained at the higher levels, unchanged against last week.

• Notably, the north Indian market saw negative sentiments as the electricity crisis remained a major issue. Hence, steel production dropped drastically.
• However, other major steel producers were looking for domestic scrap, as imported scrap was less viable, said a market player.
• Fresh offers for UK/EU-origin shredded are being quoted at $540-545/tonne (t) CFR levels, largely stable w-o-w.
• HMS offers from the UAE stand at $485-490/t CFR basis.

Ferro alloys

• Silico manganese prices declined w-o-w, owing to sluggish demand from the domestic and exports market. Current SteelMint assessment for silico manganese prices is at INR 97,350/t exw-Raipur and INR 95,350/t exw-Durgapur for 60-14 grade.
• Ferro manganese producers are reluctant to reduce prices due to supply shortages. SteelMint-assessed ferro manganese prices for HC 70% decreased to INR 99,500/t exw-Raipur and 99,800/t exw-Durgapur.
• Ferro silicon (HC 70%) prices skyrocketed to INR 147,500/t exw- Guwahati and INR 140,000/t exw-Bhutan, w-o-w in line with supply crunches and rise in demand from domestic and international producers. Bhutanese producers are still facing labour issues. However, Malaysian smelters have restarted their production with small quantities as per SteelMint reports.
• Ferro chrome prices scaled new heights at INR 105,150/t exw-Jajpur for HC 60% due to low inventory for the spot market. Meanwhile, discrepancies in export offers and container shortages influenced the producers to focus on domestic markets, SteelMint learnt.

Semi finished

On a weekly basis, domestic billet offers rose by INR 200-1,500/t across regions and the highest rise in prices was reported in western India (Ahmedabad, Jalna and Mumbai) by INR 1,400-1,500/t. whereas the sponge iron market saw prices going up by INR 200-800/t on fluctuating demand.

• An Indian state-owned steel mill floated a spot export tender for 60,000 t of steel billets (150*150mm, 3SP/4SP grade), whose due date was on 9 Jul’21. The deal has been concluded for 30,000 t at $596-598/t FoB, said sources.
• SAIL held an auction for 4,000 t of basic grade pig iron on 9 Jul’21 from its Rourkela Steel Plant in Odisha. The total quantity was booked at INR 36,200/t exw.
• Tata Metaliks reduced its foundry grade pig iron prices by 3% or INR 1,400/t ($19/t) to INR 41,000/t. Prices are exw-Kharagpur and applicable for the Kolkata and Howrah markets.
• Vizag Steel conducted an auction for 1,000 t of basic grade pig iron on 7 Jul’21 and the entire quantity was booked at INR 37,950/t, exw.
• Indian sponge iron export offers fell this week by $5-10/t on account of sluggish demand. Fresh offers floated are at $430/t, CPT Benapole, equivalent to $450/t, CFR Chittagong, Bangladesh.
• Steel grade pig iron prices slightly dropped by up to INR 500/t across regions due to weak demand on curtailed production by induction furnaces.
• Induction grade (IF) billet export offers increased marginally by $5/t w-o-w with fresh offers at $540-545/t, exw-Durgapur (equivalent to $570/t CPT Nepal). However, demand remains weak, as per trade sources.

Finished longs

The induction furnace route, finished long steels market this week observed a mixed trend in terms of prices and buying enquiries across regions. In major rebar supplying markets, prices fluctuated by INR 100-1,000/t w-o-w, SteelMint’s assessment shows. Moderate demand for and trade activities in rebar in the spot market along with supportive semi-finished steel prices pushed manufacturers to increase their rebar offers or slightly adjust prices.

• Trade reference induction grade rebar steel prices of 10-25 mm size assessed at INR 43,300-43,600/t exw Raipur, INR 45,700-46,100/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers stand at INR 700-1,000/t and trade reference prices of 200 mm angles are at INR 47,000-47,400/t exw-Raipur.
• Trade discounts given in Raipur wire rod stands at INR 800-1,000/t and trade reference prices stood at INR 45,000-45,200/t exw Raipur & INR 44,000-44,200/t exw Durgapur, size 5.5 mm.

Finished flats

This week, Indian HRC trade prices declined sharply by INR 1,500-2,000/t since traders are delaying their procurements in expectation of a further correction in HRC prices. SteelMint’s benchmark prices for 2.5 mm hot-rolled coils (HRC) stand at INR 64,500-65,500/t (exy-Mumbai) this week against INR 66,000-67,000/t (exy-Mumbai) seen last week. The prices mentioned above do not include GST @18%

Prices continue to remain under pressure due to various factors

• Indian mills are offering rebates to push up buying: Mills are trying to attract buyers by providing price support to traders to escalate buying. Meanwhile, limited export orders to traditional export destinations and subdued domestic demand pushed mills to correct prices, major Indian steel mills indicated to SteelMint.
• Fall in HRC export offers: A major Indian steelmaker has reportedly booked around 30,000 t of HRCs for exports to Vietnam. The deal price stands at around $915-920/t, CFR, for Aug’21 shipments, SteelMint learned from authentic sources. Earlier, these offers stood at $940/t CFR basis.
• Wide disparity between trade and mill prices: The list prices of HRCs now stand at INR 68,000/t and despite corrections, there is a gap of INR 1,000-2,000/t between the trade and mill prices. Despite offering rebates, mill prices are higher as compared to trade prices which may lead to further corrections in prices

Near-term outlook

Domestic HRC prices are expected to correct further in line with global prices. Also, due to limited export orders, mills are planning to divert sales to the domestic market.

Reference prices as on 10th Jul’21 (Week 28)
Prices are exw & exclusive of GST

Indian export reference prices as on 10th Jul’21
Prices in $/t
Source: SteelMint Research