Weekly round-up: Longs get some respite in overall dull steel market

Domestic billet offers rose by INR 200-1,000/tonne (t) across regions with a major hike reported in southern India. Sponge iron prices also picked up by INR 200-1,300/t on demand volatility.

The induction furnace-route finished long steels market witnessed a mixed trend this week with prices fluctuating by INR 100-1,200/t w-o-w.

Indian HRC trade prices declined by INR 1,500-1,700/t due to inactive trading as marketmen traders were expecting a further correction in prices.

Iron ore and pellets

• Iron ore miner, Serajuddin sought High Court directive to prevent the Odisha government from penalising it for not meeting its minimum production target. Considering the circumstances of the last one year, the miner wanted the state to waive 1.5 million tonnes (mn t) of its 8.5 mn t target (by 7 Jul’21) or grant it six more months.
• The Ministry of Environment, Forest and Climate Change accorded approval for enhancing the environment clearance (EC) limit of the state-run Odisha Mining Corporation’s (OMC) Daitari iron ore mine from 3 mn t to 6 mn t per annum, as per SteelMint reports.
• Eleven companies submitted technical bids for the Ajitaburu iron ore block being auctioned by the Jharkhand government. The block, a significant one, had seen preliminary interest from 24 companies (that bought the tender document), including Adani Enterprise, Thriveni Earthmovers and KJS Ahluwalia.
• SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $3/t w-o-w to $84/t FoB east coast India.
• SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) dropped by around $25/t w-o-w to $221/t.
• PELLEX was stable at INR 15,550/t DAP Raipur. Deals were not heard as there were no firm buying enquiries at quoted offers due to falling margins.

Ferrous scrap

India’s imported scrap market remained subdued for yet another week. There was almost no activity seen. Indian mills were not willing to accept the current prices owing to the disparity in the rates of domestic substitutes and the landed prices of the imported material.

Fresh offers for the UK/EU-origin shredded were being quoted at $545-550/t CFR Nhava Sheva, unchanged w-o-w. But, hardly any trade was recorded.

Offers for UK HMS were hovering at $515-520/t CFR basis, largely stable w-o-w.

In the South Asian ferrous scrap market, most major imported scrap buying countries stopped their bookings on account of the upcoming Eid holidays.

Ferro alloys

• Indian silico manganese producers reduced their offers this week due to weak demand in the domestic market. However, inquiries from European countries were still strong for immediate shipments. The current market price of silico manganese is at INR 95,000/t exw-Raipur and INR 94,500/t exw-Durgapur for 60-14 grade.
• Ferro manganese prices dropped this week to INR 98,500/t in both Raipur and Durgapur for HC 70% grade amidst weak demand. Due to reduced production of crude steel by many smaller induction furnaces, demand in the domestic market waned.
• SteelMint assessed ferro silicon prices for HC-70% at INR 140,000/t exw-Bhutan, unchanged w-o-w. Supply crunch in the domestic market and higher international prices kept prices stable.
• Ferro chrome prices skyrocketed w-o-w owing to supply-demand mismatch. South African unrest and increased supply crunch in Inner Mongolia, China triggered the price increase. SteelMint assessed ferro chrome prices at INR 105,750 exw-Jajpur for HC 60%.

Semi-finished

Indian semi-finished steel market found support in terms of price movements, following production cuts at the plants based in central and eastern regions. Hence, slight supply shortage in the spot market, and along with active demand led to price rise.

Sponge iron prices in the central, eastern and southern India gained by up to INR 1,300/t, while billet prices moved up by INR 200-1,000/t across regions.

Sources feel semi-finished steel prices may remain volatile or find support on high raw materials costs as well as slight reduction in supply along with optimistic global trends.

• Indian sponge iron export offers were stable amidst fluctuating domestic prices. Offers stood at $430-435/t, CPT Benapole, equivalent to $450-455/t, CFR Chittagong, Bangladesh.
• Steel grade pig iron prices increased slightly by INR 500-1,500/t across regions with major hikes seen in central and eastern regions by INR 700-1,500/t, followed by INR 500/t in the southern region. Supply shortage in the spot market led to spurt in pig iron prices in the domestic market.
• Induction grade (IF) billet export offers increased by $15-20/t w-o-w with fresh offers at $550-555/t, exw-Durgapur (equivalent to $575-580/t CPT Nepal). However, demand remained weak, as per trade sources.
• In Vizag Steel’s pooled iron auction on 16 Jul’21, the entire quantity of 3,150 t on offer got booked at INR 33,600 /t exw.
• SAIL held an auction for 3,000 t of basic grade pig iron on 16 Jul’21 from its Rourkela Steel Plant (RSP) in Odisha. The entire quantity was booked at INR 37,150/t exw.
• SAIL has scheduled an auction of 7,200 t (52 kg and 60 kg, full length) of commercial rails from its Bhilai Steel Plant in Chhattisgarh on 20 Jul’21.
• JSPL concluded a 30,000 t (150mm) of modified high-manganese grade steel billets export deal to China for Aug’21 shipments at $700-705/t CFR China.

Finish long steel

The induction furnace route-finished long steel market this week also witnessed mixed trends in terms of prices. Trade activities in the spot market varied from region to region. In most of the major rebar supplying markets, prices increased by INR 100-1,200/t w-o-w except in the northern region where the same declined by up to INR 1,200/t, SteelMint’s assessment shows.

Moderate demand and trade activities for rebar allowed the manufacturers to increase their rebar offers but volatile semi-finished steel prices and lack of buying enquiries pushed them to slightly adjust prices and trade discounts as per market requirements.

• Trade reference prices of induction grade rebar steel of 10-25 mm were assessed at INR 43,800-44,200/t exw-Raipur, INR 45,800-46,200/t exw-Jalna.
• Trade discounts given by Raipur based heavy structural steel manufacturers stood at INR 500-800/t. Trade reference prices of 200-mm angles were at INR 48,000-48,300/t exw.
• Trade discounts given by Raipur-based wire rod manufacturers were at INR 600-800/t. Trade reference prices stood at INR 45,400-45,600/t exw-Raipur, INR 44,200-44,500/t exw-Durgapur for 5.5 mm .

Finished flats

Indian HRC trade prices fell further since the market was quiet amidst bearish trade. Traders were expecting a further fall in prices, and thus delayed their purchases in the market.

SteelMint’s prices for the benchmark 2.5mm hot-rolled coils (HRCs) stood at INR 64,000-65,000/t (exy-Mumbai), showing a decline of INR 500-1,000/t w-o-w against INR 64,500-65,500/t (exy-Mumbai) seen last week. The prices mentioned above do not include GST @18%.

Domestic HRC trade prices fell further due to the following factors:

• SteelMint HRC FoB index drops steeply: SteelMint’s HRC FoB India index fell to $882/t FoB, showing a decline of $30/t w-o-w.
• Trade market quiet: Dealers and distributors were holding decent levels of inventories and postponed their restocking activities on expectations of a further fall in prices in the coming weeks.
• Consumer durable sector sees softness in demand: Consumer durable manufacturers witnessed slow sales and low offtake in the Apr-Jun’21 quarter due to the second wave of Covid.

However, domestic HRC prices may not correct further since Indian steel mills have concluded around 50,000-60,000 t of HRC export deals at $920-925/t CFR Vietnam as against around $915-920/t last week. Also, the rise in HRC export offers was due to a recent hike in Chinese steel futures.

Reference prices as on 17th Jul’21 (Week 29)

Prices are exw & exclusive of GST

Indian export reference prices as on 17th Jul’21

Prices in $/t
Source: SteelMint Research