Weekly round-up: Semi-finished prices fall sharply in overall dull steel market

Semi-finished steel prices registered a sharp fall during week 44 (25-30 Oct’21). Domestic billet prices fluctuated in the range of INR 200-1,800/t while sponge iron offers fell sharply by INR 400-1,500/t across regions with a major drop of INR 1,000-1,500/t reported in southern India .

India’s finished long steel market via the induction furnace (IF) route received dull response this week with prices declining by up to INR 2,100/t w-o-w except in central and western regions.

Domestic prices for hot-rolled coils (HRCs) witnessed a drop of around INR 900/t this week in the Mumbai market. However, prices of cold-rolled coils (CRCs) remained range-bound.

Iron ore and pellets

• SAIL conducted an auction for 136,000 t of iron ore fines (Fe 62.5%) from its Bolani mines in Odisha on 27 Oct’21. The auction received bids for 12,000 t offered at INR 6,100/t and for 124,000 t at INR 6,050/t (loaded on to wagon, including royalty, DMF, NMET and the additional amount mentioned in the MMDR Amendment Act).
• The High Court of Odisha is believed to have granted one month’s time to the ex-lessees of the Odisha mines to move their material. The aforesaid period starts from 15 Nov’21.
• Odisha Mining Corporation (OMC) has scheduled an e-auction for iron ore fines and lumps on 2 Nov’21. About 1.013 million tonnes (mn t) of iron ore fines and 887,000 t of lumps will be put up for auction.
• NMDC conducted an auction on 27 Oct’21 for 298,200 t of iron ore from the Kirandul and Bacheli mines in Chhattisgarh. The auction received good response for lumps and the entire quantity was sold, sources told SteelMint. Bids for DRCLO increased by INR 700/t, while those for Baila lumps remained at the base price. The rest of the lots for fines remained unsold.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, moved down marginally by INR 100/t to INR 13,100/t DAP Raipur on 29 Oct’21.
• SteelMint’s India pellet export index (Fe 64%, 3% Al, FOB east coast) fell by $3/t, w-o-w, to $147/t.
• SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $8/t, w-o-w, to $30/t FOB east coast India.

Coal

• Australian premium low-volatile (PLV) hard coking coal (HCC) prices remained mostly steady this week.
• However, prices of the weaker grades such as PCI and semi-soft increased due to supply tightness caused by the strong thermal coal market in China.
• In the Chinese coking coal market, supply tightness and restocking demand continued to provide support tothe rising CNF China prices.
• Latest prices for the premium HCC grade are assessed at around $402.50/t FOB Australia, $614/t CNF China and $431.15/t CNF India.
• South African RB2 portside prices fell by INR 1,800/t this week to INR 15,200/t ex-Gangavaram amid the correction in imported coal prices.
• South African RB1 prices fell further by $21/t w-o-w to $165/t as China’s thermal coal prices corrected further following the government’s intervention to stabilise rising coal prices. Discounts for RB2 and RB3 were assessed at $20/t and $30/t respectively.

Ferrous scrap

The Indian scrap market slowed down towards the weekend, ahead of the Diwali festival next week. However, few deals were booked at favourably lower prices. Most market players are staying away due to the festive season.

• Fresh offers for UK/EU-origin shredded are at $560-565/t CFR levels, unchanged w-o-w.
• A decent quantity of West Africa-origin HMS 1&2 (80:20) was heard to have been booked at $485/t CFR Mundra basis, down $10/t w-o-w.
• Fresh offers from UAE-origin HMS 1 is at $505-510/t CFR levels, while HMS 172 (80:20) is cited at $495-500/t CFR NHSV levels, inching down w-o-w.

Ferro alloys

The overall market was bearish this week after registering record-high price levels last week. Manganese alloys, ferro silicon, and ferro chrome prices fell w-o-w.

• Silico manganese (60-14) prices decreased by INR 12,400-15,600/t from India’s major producing belts of Durgapur and Raipur. The current market prices for silico manganese (60-14) is at INR 124,500/t exw-Raipur and INR 135,600/t exw-Durgapur. Due to low buying interest at such record levels, smelters were compelled to reduce their prices.
• Ferro manganese (HC70%) prices were reduced this week owing to weak demand from the domestic and export markets as well. SteelMint assessed, on Friday, the market price for HC70% grade of ferro manganese at INR 130,000/t exw from both Durgapur and Raipur, the two largest ferro manganese producing regions in India.
• Indian ferro chrome prices went down after Chinese stainless steel players rolled over the purchase tender prices of the material. Easing of power supply curbs in line with the increase in production of ferro chrome was also a reason behind the correction in prices of ferro chrome. According to SteelMint’s assessment on Wednesday, prices of ferro chrome (HC60%) are at around INR 121,750/t exw-Jajpur.
• Ferro silicon prices downtrended as buyers were reluctant to book material at higher prices. The current market price for ferro silicon (HC70%) is at around INR 265,500/t exw-Guwahati while from Bhutan, the prices (HC70%) are at around INR 270,000/t exw.

Semi-finished

On a weekly basis, domestic sponge iron offers fell sharply by INR 400-1,500/t across regions and the major fall in prices was reported in southern India by INR 1,000-1,500/t. Billets prices were volatile ranging over INR 200-1,800/t on fluctuating demand

• SAIL held an auction for 700 t of steel grade pig iron on 28 Oct’21 from the Durgapur Steel Plant (DSP) and the entire quantity got booked at a weighted average price of INR 44,050/t exw, sources informed SteelMint.
• At Vizag Steel’s pooled iron auction on 27 Oct’21, the entire quantity of 1,600 t on offer got booked at INR 39,750/t exw.
• SAIL conducted an auction for 2,000 t of basic grade pig iron on 27 Oct’21 from its Bokaro Steel Plant (BSL). The base price was set at INR 44,500/t, but buyers showed no interest and the auction closed without a single bid being placed.
• Indian sponge iron export offers fell by $35/t, w-o-w, to around $480/t CPT Benapole, equivalent to $510/t CFR Chittagong, Bangladesh. About 4,000 t of deals were reported this week.
• Steel grade pig iron prices remained under pressure on account of a slight improvement in supply and decline in coal prices amid low demand. Prices fell by INR 400-1,000/t in the central, eastern and northern regions.
• IF-route billet export offers fell by $10/t, w-o-w, to $615-620/t exw-Durgapur, equivalent to $640-645/t, CPT Nepal, via road delivery. Limited demand was reported this week due to the festive mood along with sufficient stocks with buyers amidst unclear market trends.

Finished longs

India’s finished long steel manufactured via the induction furnace route in this week saw limited demand and transactions in the spot market across the major supplying regions in the country. Prices declined by up to INR 2,100/t w-o-w except in the central and western regions, SteelMint assessment shows. Limited buying enquiries and future bookings in finished steel on higher prices and rising inventories, pressurised manufacturers to reduce prices as per market requirements and movement of raw material prices, sources shared.

• The trade reference price of Fe 500 grade rebar steel manufactured via IF route for 10-25 mm is assessed at INR 49,900-50,100/t exw-Raipur, INR 52,200-52,600/t exw-Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were in the range of INR 700-1,000/t and trade reference prices of 200 mm angles stood at INR 55,200-55,600/t exw-Raipur.
• Trade discounts given by Raipur-based wire rod suppliers were at INR 1,200-1,500/t and trade reference prices stood at INR 49,800-50,100/t exw-Raipur, and at INR 49,700-49,800/t exw-Durgapur, for 5.5 mm.

Finished flats

Domestic prices for hot-rolled coils (HRCs) witnessed a decline of around INR 900/t this week in the Mumbai market. Hhowever, prices of cold-rolled coils (CRCs) remained range-bound.

Trade reference prices:

• SteelMint’s benchmark price assessment for 2.5-8 mm IS 2062 HRC stands at INR 71,000-72,000/t (exy-Mumbai).
• CRC (IS 513 Gr O, 0.9mm) prices remained range-bound at INR 75,500-76,000/t (exy-Mumbai).

Prices are exy-Mumbai basis, excluding GST at 18%.

Market activities slowed down this week with lesser number of participants remaining active in the market ahead of the festive days. Also, end-users’ demand remained need-based at the prevailing price levels.