Weekly round-up: Finished longs prices rise but rain plays spoilsport

Indian semi-finished steel market remains supported as prices gain further by up to INR 2,000/t, w-o-w. In the first half during the week good demand was noticed in the spot market, while trades were dull later on.

The sponge iron prices surged sharply in eastern region by INR 500-1,000/t, while billet prices rose majorly in the west & northern regions by INR 700-2,000/t, w-o-w.

India’s induction furnace rebar market, in this week witnessed an upward trend and in most of the major markets rebar steel prices increased by INR 300-1,400/t w-o-w, except in Chennai market of southern region, SteelMint assessment shows.

In addition, Domestic HRC prices continued to remain under pressure due to bearish market sentiments and sluggish sales. The prices for HRC 2.5 mm remained unchanged at INR 64,000-65,000/tonne (t) exy-Mumbai for the second consecutive week, as per SteelMint’s assessment.

Iron ore and pellet

• Steel Authority of India Ltd (SAIL) conducted an auction on 20th July for 76,000 t of iron ore tailings (Fe 51.11% and Fe 52.5%) from its Dalli iron ore mines in Chhattisgarh. The tender failed to fetch any response.
• NMDC, conducted an auction on 20 Jul’21 for 159,600 t of iron ore from the Bacheli mines in Chhattisgarh. The auction received active participation with the entire quantity getting booked, except the ROM lot of 16,800 t. Bids for DR-CLO moved up by around INR 1,560/t over the set base price.
• NMDC, conducted an auction on 20 Jul’21 for 50,400 t of iron ore from the company’s Kirandul mines in Chhattisgarh, Entire quantity got booked with bids for Baila iron ore lump moving up by around INR 2,060/t over the set base price. Bids for fines moved up by around INR 620/t over the set base price.
• Odisha Mining Corporation (OMC) held an auction for 689,000 t of iron ore fines on 22nd July. The auction received weak response, with only 117,000 t* getting booked at the base price.
• SteelMint’s bi-weekly domestic pellet index, PELLEX, remains stable at INR 14,700/t DAP Raipur after a sharp decline of INR 850/t on 20 Jul’21.
• SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) has recorded a drop of around $4/t w-o-w and currently stands at $217/t.
• SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $4/t w-o-w to $80/t FoB east coast India.

Coal

• Australian premium hard coking coal prices continued to increase over the past week, with several high-priced spot deals concluded in the ex-China markets.
• Furthermore, a major European end-user issued a buy tender for Australian Peak Downs North branded premium mid-volatile matter, with an end-Aug’21 laycan.
• Even as demand for Australian coking coal has been persistently high in most Asian markets excluding China, Indian demand for seaborne coking coal has lately remained largely subdued, primarily because both steel demand and metallurgical coke prices are declining due to the prevalence of the monsoon.
• Meanwhile, ongoing safety checks and suspension of operations at various coal mines in China, coupled with the country’s ongoing import restrictions on Australian coals, have fuelled supply concerns among end-users seeking prompt delivery of premium grade coking coal.
• Latest prices for the premium HCC grade are assessed at around $212.50/t FoB Australia, $315.00/t CNF China and $239.40/t CNF India.
• South African RB2 portside prices remained largely unchanged this week, averaging INR 8,100/t ex-Gangavaram.
• South African RB1 prices for Aug’21 have been assessed at $130.6/t. Operations at RBCT Port have been normalised post last week’s disruption but Transnet’s rail line has gone on maintenance till 26 Jul’21.

Ferrous scrap

• India’s imported scrap market continued to remain dull for yet another week. No active bookings were recorded this week due to discrepancies in bids and offers. SteelMint’s assessment for UK/EU-origin shredded stood at $540/t CFR Nhava Sheva . Imported scrap offers into India remained slightly up this week with limited deals heard for West Africa-origin HMS, SteelMint learnt.
• Indian mills are still struggling with lower finished steel sales in the domestic market. Mills are getting their scrap requirement fulfilled from the local market itself, which reduced imported scrap demand. Once mills resume their full production, demand for imported scrap willautomatically increase.

Ferro alloys

• Silico manganese producers have been reducing prices w-o-w due to weak demand in the domestic market. SteelMint assessed the prices at INR 94,000/t exw-Raipur and INR 93,375/t exw-Durgapur for 60-14 grade.
• SteelMint learnt, current market prices of ferro manganese for HC-70% grade are hovering at around INR 98,500-99,000/t for both Durgapur and Raipur. Due to dull demand for silico manganese, some producers shifted to ferro manganese production.
• Ferro chrome prices spiked by INR 5,000/t to INR 111,300/t owing to increased inquiries from the Chinese market. The prices increased significantly in China throughout the week, triggering the rally in the Indian market.
• Ferro silicon prices slumped this week to INR 133,000/t exw-Bhutan and to INR 135,500/t exw-Guwahati owing to low demand as buyers resisted purchasing at higher prices.

Semi-finished

The Indian semi-finished steel market remained supported as prices gained further by up to INR 2,000/t, w-o-w. Demand was subdued during the week as, at the beginning of the week, there was good demand in the spot market, while, in the later days, trade was dull.

Sponge iron prices increased sharply in the eastern region by INR 500-1,000/t, while billet prices rose sharply in the western and northern regions by INR 700-2,000/t, w-o-w.

Sources expect that semi-finished steel prices will remain supported due to balanced supply-demand as well as sufficient orders with manufacturers following optimistic global market trends.

• Indian sponge iron export offers increased this week by $20/t to around $450/t, CPT Benapole, equivalent to $470/t, CFR Chittagong, Bangladesh. Demand was weak due to the ongoing Eid festival and lockdown in Bangladesh.
• Steel grade pig iron prices picked up by INR 300-1,000/t across regions with major hikes seen in the northern and eastern regions by INR 700-1,000/t, followed by INR 300-500/t in the central region. Active demand as well as supply shortage in the spot market continued to support Indian pig iron prices.
• Induction grade (IF) billet export offers increased by $10-15/t w-o-w with fresh offers at $560-565/t, exw-Durgapur (equivalent to $590/t CPT Nepal). About 15,000 t deals were confirmed this week.

Finished long

India’s finish long steel manufactured via the induction furnace(IF) route, this week, witnessed an upward trend in terms of prices. In most of the major markets, rebar steel prices increased by INR 300-1,400/t w-o-w, except in Chennai in the southern region, SteelMint assessment shows.

At the beginning of this week, improved demand and appropriate transactions for rebar steel in the spot market supported the manufacturers to keep prices high. However, limited buying interest and slow trade observed from middle of the week, owing to heavy rainfall in many cities and volatile semi-finished steel prices lowered trade activities which pushed the sellers to slightly adjust prices as per requirements of the market.

• Trade reference induction grade rebar steel prices of 10-25 mm were assessed at INR 44,500-44,800/t exw-Raipur and at INR 46,900-47,300/t exw-Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers stand at INR 700-1,000/t and trade reference prices for the 200-mm angles were at INR 48,500-48,900/t exw-Raipur.
• Trade discounts given by Raipur based suppliers stood at INR 800-1,000/t and trade reference prices stood at INR 45,500-45,700/t exw Raipur & INR 45,500-45,700/t exw Durgapur, size 5.5 mm.

Finished flats

Domestic HRC trade prices continued to remain under pressure as market sentiments were bearish amid sluggish sales.

SteelMint’s prices for the benchmark 2.5 mm hot-rolled coils (HRC) remained unchanged at INR 64,000-65,000/tonne (t) exy-Mumbai for the second consecutive week. The prices mentioned above are exclusive of GST @18%.However, prices in the other key markets of Chennai and Faridabad saw a decline over the previous week.

• Anticipation of rebates from mills to push buying- The downstream industries and end-users have turned observant and are postponing purchases on expectations that mills may provide rebates to whet buying interest. Market participants expect a rebate of INR 1,500-2,000/t from major steel mills in Aug’21.
• Traders holding enough stocks- Trade participants told SteelMint that currently they are holding around 20-25 days’ inventory in hand and are less likely to procure fresh material at higher prices. Once this inventory starts easing, traders might resume buying.
• Inactive buying in auto, consumer segments- End-user demand for auto and consumer durable goods had taken a hit in the early months of FY’22.
• On the other hand, SteelMint expects that prices may remain range-bound.A few HRC export deals aggregating to 60,000 t were reported to be concluded to Vietnam at around $925-930/t CFR in the last week. Recently Indian mills booked 30,000 t HRC to South Korea at $950/t CFR basis for Aug-Sep shipments.

Reference prices as on 24th Jul’21 (Week 30)
Prices are exw & exclusive of GST

Indian export reference prices as on 24th Jul’21
Prices in $/t
Source: SteelMint Research