Weekly round-up: Flats prices inch up while long steel market witnesses downtrend

The domestic steel market remained weak during week 14 (28 Mar-2 April’22). Semi-finished steel prices fell in the range of INR 250-2,200/tonnes (t).

On a weekly basis, the prices of rebar in most markets plunged INR 2,200/t, SteelMint assessment shows. The trade reference prices of flat steel products continued to inch up this week despite slow end-user demand.

Iron Ore and Pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 13,000/tonne (t) DAP Raipur on 1 April, down INR 600/t compared with the last assessment on 29 March.
• India’s pellet export market continued to remain inactive for yet another week despite higher global prices and the rise in iron ore futures prices. SteelMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) stands at $152/t, up 4/t w-o-w.
• Steel Authority of India Ltd (SAIL) conducted an auction on 30 March for 40,000 t of iron ore fines (Fe 62.5%-indicative) from its Bolani iron ore mines in Odisha. The company received bids for the entire material at INR 5,950-6,000/t (including royalty, DMF and NMET), down INR 840/t as against the last auction on 24 Feb. Drop in pellet prices resulted in low bids for iron ore, SteelMint notes.
• India’s largest merchant iron ore miner NMDC raised iron ore list prices by up to INR 200/t for April deliveries. The revised offers are: DR CLO (10-40mm, Fe 67%) – INR 7,320/t; and Baila fines (Fe 64%) – INR 5,160/t. Prices are on FOR basis, excluding royalty and taxes. Notably, royalty rates for Jan have come down compared with Dec’21.

Coal

• Australian premium low-volatile hard coking coal prices plunged 23% w-o-w amid buyers’ resistance at high prices and the easing of panic over the Russia-Ukraine conflict.
• Latest prices for premium HCC grade are assessed at around $480/t FOB Australia and $508/t CNF India.
• Portside prices of RB2 (5500 kcal/kg NAR) coal were range-bound at INR 19,500-20,000/t levels as buyers retreated to the sidelines due to high offers.
• South African RB1 coal prices for April saw a w-o-w correction of $15/t to $256t on FOB basis amid reduced European demand due to the onset of summer and bearish buying sentiment on surging Covid-19 cases in China.

Ferrous Scrap

• The imported scrap market in India continued to remain silent with no active movement witnessed for yet another week. Many steel mills are waiting for a clearer market direction since offers were firm for the last couple of weeks but mills opted for domestic material, the latter being more cost effective. Most of the buyers are interested in booking short sea distance as they are looking for prompt delivery.
• Fresh offers for UK-origin shredded scrap are at $660-665/t CFR levels, up by $10/t w-o-w but no deals were reported.
• UAE-origin HMS was being offered at $575-580/t CFR levels. Deals for 2,500 t of Dubai-origin HMS1 were concluded at $590/t CFR Mundra mid-week.
  Deals for 2,000 tonnes of South African HMS were concluded at $615/t CFR Chennai during the middle of the week.

Ferro Alloys

• The overall bulk ferro alloys market saw a downward trend due to poor buying interest and high selling pressure.
• Indian silico manganese (60-14) prices dropped on the lack of demand. High selling pressure on Indian financial year-end closing targets forced smelters to reduce offers. According to SteelMint’s assessment on 3 April, silico manganese (60-14) prices were hovering around INR 108,000-110,000/t exw Durgapur and Raipur.
• Indian ferro manganese (HC 70%) prices fell by INR 2,000-2,300/t w-o-w to INR 113,000-114,000/t exw from both Raipur and Durgapur. Muted demand resulted in the decline in ferro manganese prices.
• Indian ferro silicon (70%) prices fell significantly by around INR 12,000-13,000/t w-o-w to INR 180,000-181,000/t exw from both Guwahati and Bhutan. A major buyer concluded a tender at lower than the market price. Meanwhile, many buyers were waiting for the new price opening in the new financial year.
• Indian ferro chrome (HC 60%) prices decreased w-o-w as buyers were hesitant to book higher volumes of ferro chrome this week which led to sluggish domestic demand. Muted Chinese demand also resulted in the decline in ferro chrome prices. Ferro chrome prices were hovering around INR 120,000/t exw Jajpur.

Semi Finished

• Indian semi-finished steel prices remained under pressure. Domestic billet prices fell by INR 250-1,500/t across regions, with the major decline seen in Hyderabad. However, offers rose by INR 600-1,100/t in the western region. Similarly, low demand and falling billet prices weighed on sponge iron offers, as prices declined by INR 400-2,200/t, as per SteelMint’s assessment.
• About 65-70% of power cuts were reported in the induction furnace (IF)-based steel mills at the Jindal Industrial Park in Raigarh’s Punjipathra, central India.
• Tata Metaliks concluded a rake of foundry grade pig iron tender to Punjab at INR 59,900/t ex-siding Phillaur (Ludhiana).
• An Indian steel mill has concluded an export tender for 40,000 t of basic grade pig iron for 30 April shipment at around $790-800/t on FOB basis.
• SAIL held an auction for 900 t of steel grade pig iron (by road) on 29 March from its IISCO steel plant in West Bengal in which buyers booked the entire quantity at a weighted average price of INR 59,800/t exw.
• Indian sponge iron export offers fell this week by $20/t to $530/t CPT Benapole, equivalent to $560/t CFR Chittagong, Bangladesh. About 5,000 t deals were reported on revised prices.
• Indian IF route billet export demand improved owing to the power crisis in Nepal. About 25,000 t of deals were confirmed this week at $750/t exw eastern India, equivalent to $770-775/t CPT Nepal, via road and rake delivery.
• Indian spot pig iron prices remained volatile this week following fluctuations in billet prices. Prices in the central and eastern India remained stable, while the northern region saw offers increasing by INR 800-1,000/t w-o-w.

Finished Long

• India’s induction furnace finished long steel market witnessed weak buying enquiries and trades this week. Manufacturers observed a lack of future booking orders and inventories also increased marginally, which forced them to reduce offers in the spot market. On a weekly basis, prices of rebar in most markets plunged INR 2,200/t, SteelMint assessment shows.
• The trade reference prices of Fe 500 grade rebar (10-25mm)  manufactured via the IF route was assessed at INR 61,100-61,500/t exw Raipur and INR 66,100-66,500/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 800-1,000/t and the trade reference price of 200mm angle stood at INR 65,500-66,000/t exw Raipur.
• Trade discounts offered by Raipur-based wire rods suppliers were around INR 1,000/t and the trade reference prices stood at INR 61,000-61,400/t exw Raipur and INR 61,500-61,700/t exw Durgapur for size 5.5mm wire rods.

Finished Flat

• The trade reference prices of flat steel products continued to inch up this week despite slow end-user demand. The market was active because of active buying by the distribution channel participants rushing to procure the balance volumes as per MoU or other contractual terms signed with the mills.
• However, the end-user industries have been sticking to need-based buying amidst the consistently high prices of flat products. This remains the major bone of contention for distributors and sellers.
• Meanwhile, a couple of mills increased their list prices by INR 1,000/t earlier this week. Furthermore, distribution network participants are anticipating mills to announce a hike of INR 3,000/t or more in the coming week for early April deliveries.
• “The cost pressure amid increasing raw material and coating material prices is likely to keep the flat steel prices firm in the short- to medium-term,” a western India-based distributor said.
• On the exports front, mills have resumed offering HRC for exports to the UAE this week, with indicative prices at around $1,100-1,110/t CFR for June deliveries. However, the entry of cheaper Chinese HRC into the European market has pulled the offers down to $1,320-1,330/t CFR towards the weekend as against $1,365-1,375/t CFR at the beginning of the week.