Weekly round-up: Indian steel prices fall amid dull demand

Indian semi-finished steel market remained dull on account of slow demand in finished steel products during the week 48 (22 Nov’21 to 27 Nov’21). The offers from mid sized secondary steel mills declined by INR 500-1,700/t across regions in the country.

Finished long steel prices sharply plunged by INR 500-2,000/t w-o-w, SteelMint assessment shows. Inventories are rising in mills as a result, selling pressure was observed in rebar section.

Moreover, domestic finished flat steel prices dropped further during this week due to the low demand from the buyers end as they are cautious of the continual decline in global prices.

Iron ore and pellets

• NMDC has scheduled two iron ore auctions. The first auction is for 222,600 t of Fe 64%-67% grade material from the company’s Bacheli mines, while the second is for 75,600 t of Fe 64%-65.5% grade ore from the Kirandul mines — both in Chhattisgarh. The auctions are scheduled for 29 Nov’21.
• Rungta Mines Ltd (RML) has started production from its 3-mn t per annum pellet plant in village Chaliyama, Jharkhand, sources confirmed to SteelMint. The company is offering pellets (Fe64-64.5%) at around INR 10,000-10,500/t in the merchant market.
• JSW Steel had scheduled an auction for 600,400 tonnes (t) of iron ore fines (Fe 55-57%) on 24 Nov’21. The base price of the material was set at INR 500/t ex-mines. About 50% of material, at 308,100 t, was booked at the base price.
• Tata Steel has commissioned an 8 mn t per annum iron ore processing plant at its captive Khondbond mine in Odisha’s Keonjhar district.
• State-run Odisha Mining Corporation (OMC) has scheduled an iron ore fines and lumps auction on 3 Dec’21. Around 800,000 t of iron ore lumps and 968,000 t of fines will be put up for auction from OMC’s mines.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell sharply to INR 10,350/t DAP Raipur on 26 Nov’21, lower by INR 550/t against its last assessment of INR 10,900/t on 23 Nov’21.
• Steelmint’s India pellet export index (Fe 64%, 3% Al, FOB east coast) rose marginally by $3/t w-o-w to $129/t.
• SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) increased by $6/t to $32/t FOB east coast India.

Coal

• Australian premium low-volatile (PLV) hard coking coal (HCC) prices decreased by almost $50/t, or 13.5% this week, amid subdued demand despite the prevailing weather-induced supply tightness in Australia.
• Trading activity remained thin as most end-users stayed on the sidelines, showing no urgency to transact in the short term due to the recent volatility.
• Meanwhile, potential supply concerns prevailed amongst market participants over predictions about heavy rainfall in Australia’s key production hub of Queensland.
• Latest prices for the premium HCC grade are assessed at around $364/tonne (t) FOB Australia, $440/t CNF China and $383/t CNF India.
• South African RB2 portside prices rose by INR 2,000/t to INR 12,300/t amid limited stock at major ports.
• South African RB1 prices rebounded briefly from last week before settling at $150/t amid uncertainty surrounding the new Covid-19 variant. Discounts for RB2 and RB3 were assessed at $12/t and $24/t respectively.

Ferrous scrap

India’s imported scrap trade remained silent for yet another week with no aggressive bookings being observed. Imported scrap offers saw a slight correction as compared to last week. Market players continued to await further price corrections due to sluggish domestic market sentiments.

• Fresh offers for shredded scrap are being quoted at $550-555/t CFR Nhava Sheva, down $5-10/t w-o-w.
• Around 1,000 t of UAE-origin containerised HMS 1 scrap was booked by a Gujarat-based mill at $475/t CFR earlier this week. However, the majority of offers are at $480-485/t CFR levels.

Ferro alloys

The overall market saw a mixed trend with manganese alloys and ferro silicon prices  rebounding, while ferro chrome prices took a dip on muted Chinese demand.

• According to SteelMint’s assessment on 26 Nov’21, Indian silico manganese (60-14) prices bounced back by INR 2,600-2,850/t exw w-o-w. Sellers are reluctant to decrease their offers post-observing good inquiries in the market. Current market prices of silico manganese are hovering at INR 97,000-97,100/t exw from both Raipur and Durgapur.
• Indian ferro manganese (HC70%) prices are comparatively stable with a marginal drop from the previous week due to moderate demand. The current market prices are hovering at around INR 105,000-106,000/t exw from both Raipur and Durgapur, assessed on 26 Nov’21
• Indian ferro chrome (HC60%) prices declined this week owing to limited demand from Chinese steel mills. SteelMint assessed on 24 Nov’21 ferro chrome offers at around INR 115,725/t exw Jajpur — down by INR 2,225/t w-o-w to INR 117,950/t exw-Jajpur.
• Indian ferro silicon (HC70%) prices inched up w-o-w by INR 12,500/t exw-Guwahati, as domestic sellers are taking advantage of the delay in the arrival of seaborne material in India. As per SteelMint’s assessment, on 25 Nov’21, ferro silicon market prices were at INR 190,000/t exw-Guwahati and INR 200,000/t exw-Bhutan.

Semi-finished

Indian semi-finished steel prices fell further on account of slow demand in finished steel products following sluggish trends globally. Domestic billet prices fell by INR 500-1,700/t across regions and the western and southern regions saw major corrections of INR 1,500-1,700/t.
Similarly, sponge iron offers plunged by INR 500-1,000/t with a major decline of INR 700-1,000/t seen in central and eastern regions.
Sources feel, semis prices will remain volatile in the coming week on account of subdued demand amidst tightening thermal coal prices.

• IF-route billet export offers fell by $15-20/t, w-o-w, to around $550/t exw-Durgapur, equivalent to $575/t, CPT Nepal, via road delivery. Demand remains limited, as per participants.
• Export prices of sponge iron (FeM 80%, lumps 100%) fell by $10/t to $440/t CPT Benapole, equivalent to $470/t CFR Chittagong. About 2,000 t deals were confirmed this week.
• SteelMint’s price assessment for steel grade pig iron plunged by INR 700-2,400/t, w-o-w, and the sharpest fall was recorded in central India, by INR 2,000-2,400/t, followed by INR 700-1,400/t in the southern, northern and eastern regions.
• Tata Metaliks has reduced pig iron prices by INR 1,800/t and the fresh offers for foundry grade stood at INR 44,200/t and basic grade pig iron at INR 41,200/t. Prices are exw-Kharagpur and applicable to the Kolkata and Howrah markets.
• Western India-based Vedanta Resources reduced pig iron prices by INR 1,000/t for the Gujarat-based buyers and the revised offers were reported at around INR 48,000/t DAP Ahmedabad.
• SAIL held an auction for 9,500 t of steel grade pig iron on 25 Nov’21 from the Rourkela Steel Plant (RSP) in Odisha and the entire quantity was booked at a weighted average price of INR 36,720/t exw.

Finished longs

India’s finished long steel manufactured via the induction furnace route, in this week, observed subdued demand and lack of transactions in the spot market across the major supplying regions. Prices plunged by INR 500-2,000/t w-o-w, SteelMint’s assessment shows. Due to dull enquiries and future bookings in finished steel, inventories are rising at mills, pressurising manufacturers to reduce prices as per market requirements and raw material price movements, sources shared.

• The trade reference price of Fe 500 grade rebar steel manufactured via IF route for 10-25 mm size is assessed at INR 44,800-45,100/t exw-Raipur, INR 48,500-48,900/t exw-Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers are in the range of INR 1,500-1,800/t and trade reference prices of 200 mm angles stood at INR 51,000-51,400/t exw-Raipur.
• Trade discounts given by Raipur -based wire rod suppliers were at INR 1,200-1,500/t and trade reference prices at INR 45,200-45,400/t exw-Raipur, INR 45,100-45,300/t exw-Durgapur, for the 5.5 mm category.

Finished flats

• Domestic trade reference prices across the flat steel category fell further in the key markets this week. With this, the trade market prices now stand at a discount to mill prices.
• Buyers have remained cautious of the continual decline in global prices. Meanwhile, the price policy announcement by mills, due in the upcoming week, has kept the market largely quiet over the current week.
• Most buyers have waited for the rebates, while none of the mills has announced price support uptil now for November. However, buyers are expecting some concessions from the mills in the upcoming price revision.