The induction furnace-route, finished long steel market fluctuated this week, with prices increasing by INR 300-900/t w-o-w specifically in the northern, eastern and central parts of the country.
In addition, during Week 33, CRC trade reference prices witnessed a sharp decline of around INR 1,500-1,700/t in a few major markets.
The Indian semi-finished market remained supported due to supply shortage because of the production cuts undertaken by mills in central and eastern parts of India. Sponge iron prices gained by INR 200-1,000/t, while billet prices were up by INR 200-1,100/t across major markets.
Iron ore and pellets
- The Chhattisgarh government has identified four iron ore blocks to be put up for auction.
- SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell marginally to INR 14,450/tonne (t) DAP Raipur on 13 Aug’21 in the absence of trade. Declining pellet export realisations may result in weakening of domestic offers in the upcoming days, said market participants.
- SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) recorded a drop of $27/t w-o-w and currently stands at $156/t. The index has fallen to a nearly eight-month low, as per SteelMint data. In the absence of firm bids from China and drop in global iron ore prices, Indian pellet exports to China have dried up.
- India’s iron ore export prices continued to fall further throughout the week starting 6 Aug’21. SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $12/t w-o-w to $57/t FoB east coast India. The index is at an 11-month low, as per data maintained with SteelMint.
Ferrous scrap
Indian imported scrap buyers have gradually increased their inquiries for imported scrap and resumed bookings for fresh slots for Sept’21 shipments as they see lesser chances of a price correction.
Market players are actively procuring scrap as limited stock is available with their mills due to absence of inquiries in the past couple of months. Market insiders expect the trade for imported scrap to increase ahead of the favourable construction season.
- Around 1,000 t of shredded scrap of non US-origin have been booked by a major steel mill at $525/t CFR Nhava Sheva equivalent levels.
- Fresh offers for UK/EU-origin shredded are being offered at $530-535/t CFR levels, up by $5/t w-o-w.
- Another western India-based major steel producer has booked 6,000 t of UAE-origin HMS 1 at $475/t CFR levels and, from West Africa, around 4,000 t of HMS 1&2 (80:20) at $450/t CFR.
- Few deals of Brazil-origin HMS (80:20) were heard at $480/t CFR Nhava Sheva earlier in the week.
Ferro alloys
The overall market saw mixed trends this week. Manganese alloys and ferro chrome prices gained upward momentum while ferro silicon prices declined slightly.
- Silico manganese prices went up marginally in line with higher prices of coke and increased freight costs. The current market prices of silico manganese for 60-14 are hovering at around INR 95,000 to 96,200/t exw for both Durgapur and Raipur. Exporters are offering at $1415/t owing to good demand from the global market.
- As per SteelMint’s assessment, ferro manganese prices have slightly increased to INR 97,000/t exw-Durgapur and by INR 98,250/t exw-Raipur for HC 70% grade. Due to better inquiries from both domestic and international markets, buyers are trying to increase their offers.
- Ferro chrome prices are surging w-o-w owing to supply crunches as only a handful of producers are offering in the market. Increased Chinese ferro chrome prices also supported domestic ferro chrome prices. SteelMint’s assessed current ferro chrome prices are at INR 130,000/t exw-Jajpur.
- Ferro silicon smelters are reluctant to reduce their offers due to the increased prices of coke. Dull demand from the market is pressuring them to decrease their offers. Currently, producers are offering at INR 127,000/t exw-Guwahati and INR 127,375/t exw-Bhutan for HC 70% grade, as per SteelMint’s assessment.
Semi-finished
The Indian semi-finished market remained supported due to supply shortage because of the production cutbacks undertaken by mills based in central and eastern parts of India. Hence, a slight supply shortage in the spot market led to gain in prices along with active demand.
Sponge iron prices gained by INR 200-1,000/t, while billet prices were up by INR 200-1,100/t across major markets.
Pellet sponge (P-DRI, FeM 80%) prices in Raipur touched a three-month high this week as the same range was last seen during mid-May’21.
- SAIL held an auction for 8,000 t of basic grade pig iron from its Bhilai Steel Plant in Chhattisgarh on 13 Aug’21. Buyers booked the entire quantity at a weighted average price of INR 39,030/t exw.
- SAIL has scheduled an auction for 3,000 t of steel grade pig iron from the Rourkela Steel Plant in Odisha on 16 Aug’21.
- Vizag Steel concluded an auction for 3,500 t of pooled iron on 11 Aug’21 where buyers booked the entire quantity at a weighted average price of INR 34,500/t exw.
- Tata Metaliks had floated a tender for one rake (around 2,200 t) of foundry grade pig iron on 11 Aug’21. The tender received slightly lower bids at around INR 43,000/t FoR Phillaur siding in Punjab.
- An Indian mill has concluded an export tender for 30,000 t of steel grade pig iron for end-Aug shipment at $580/t, CFR East Asia.
- SAIL has floated an export tender for 18,900 t of steel billets (150x150mm, 4SP/5SP grade) for mid-Oct’21 shipment, as per latest reports. The due date for the tender is 16 Aug’21.
- Induction route (IF) billet export offers were more or less stable this week with fresh offers at $580-585/t, exw-Durgapur (equivalent to $610/t CPT Nepal).
- Steel-grade pig iron prices fell slightly by INR 100-400/t across regions due to subdued demand on higher offers from the plants.
- Indian sponge C-DRI (FeM 80%, lumps 100%) export offers were unchanged in fresh deals reported this week. SteelMint’s assessment stood at $460-465/t CPT Benapole, equivalent to $485/t CFR Chittagong.
Finished longs
The induction furnace route, finished long steel market fluctuated this week with prices seeing an increase by INR 300-900/t w-o-w across regions, especially the northern, eastern and central regions owing to slight improvement in buying enquiries and transactions for rebar steel in the spot market as well as higher cost of raw material (semi-finished.
The western and southern regions saw offers remaining stable despite limited trade in the middle of the week which pushed them to marginally adjust trade prices by INR 100-300/t.
- Prices of trade reference induction grade rebar of 10-25 mm were assessed at INR 45,500-45,800/t exw-Raipur, and at INR 48,300-48,700/t exw-Jalna.
- Trade discounts given by Raipur-based heavy structural steel manufacturers stand at INR 800-1,100/t and trade reference price of 200 mm angles were at INR 49,600-50,100/t exw-Raipur.
- Trade discounts given by Raipur-based wire rod supliers were at INR 900-1,100/t while trade reference prices stood at INR 46,300-46,500/t exw-Raipur and at INR 46,200-46,500/t exw-Durgapur, for 5.5 mm.
Finished flats
This week, the trade reference prices of CRC (IS 513, Gr O, 0.9mm) witnessed a sharp decline of around INR 1,500-1,700/t in a few major markets.
SteelMint’s benchmark price assessments of 0.9 mm, IS 513 Gr O cold-rolled coils (CRCs) dropped by around INR 1,000/t to INR 78,000-79,000/t exy-Mumbai as compared to INR 79,000-80,000/t seen a week ago. The prices mentioned above are exclusive of GST @18%.
Notable points on the price momentum of CRCs:
- The inventory of CRC remained high in the market due to weak demand as most of the end-user industries failed to maintain the momentum that they had gained in H2CY’20. However, mills had diverted their resources to produce more of CRCs anticipating good demand in CY’21.
- The mills had to reduce their export offers for CRCs as trade with the European Union slowed down because of higher offers. Export offers for CRCs have come down by $100/t to $1,220-1,230/t FoB India, as against $1,320-1,330/t FoB at the beginning of Jul’21.
- The price spread between HRCs and CRCs has come down significantly by around INR 5,400/t from its peak mid-Jun’21. The spread after this week’s assessment stands around INR 11,100/t, contrasted against INR 16,600/t in mid-Jun’21.
On the other hand, domestic HRC prices have remained range-bound due to sluggish trade. SteelMint’s benchmark price assessments of 2.5-8 mm IS 2062 hot-rolled coils (HRC) stood around INR 67,000-67,500/t (exy-Mumbai) as compared to INR 66,500-67,500/t seen a week ago. The prices mentioned above are exclusive of GST @18%.
Reference prices as on 14th Aug’21 (Week 33)
Prices are exw & exclusive of GST
Indian export reference prices as on 14th Aug’21
Prices in $/t
Source: SteelMint Research
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