Weekly round-up: Indian semi-finished market volatile, flat steel prices decline

The domestic steel market saw mixed trends during week 24 (6 June-11 June’22). Semi-finished steel prices fluctuated in the range of INR 200-1,500/tonne (t). Domestic induction furnace-finished long steel offers plunged by up to INR 2,000/t w-o-w. The trade reference prices for finished flats (HRCs and CRCs) fell by INR 500-6,500/t.

Iron ore and pellets

• Vedanta subsidiary – Electrosteel Steels Ltd (ESL) – had scheduled an auction for the sale of around 70,000 t of fines and lumps (both Fe 58-60%) today from its Nadidih BICO and Feegrade mines, Odisha. According to market sources, the entire quantity of 50,000 t of fines was booked at around INR 1,550-1,600/t ex-mines (including Royalty, DMF & NMET) against the base price of INR 1,550/t. Only 6,000 t of lumps was booked out of 20,000 t at the base price of INR 2,800/t.
• State PSU miner OMC has scheduled an iron ore auction for 17 June 2022. Around 1.187 mnt of lump ore and 1.52 mnt of iron ore fines will be put up for auction. The base price of the auction is yet to be disclosed. In the previous auction, the merchant miner received a weak response, as out of a total of 2.106 mnt of material on offer, 1.474 mnt (70%) received bids.
• India’s pellet export market remained silent for yet another week after the export duty announcement. Price indications for standard grade pellets were heard at around $160/t, CFR China. However, due to a steep duty of 45% on pellets, prices were not workable. Meanwhile, an Indian mill floated a pellet export tender for empanelled customers.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,000/tonne (t) DAP Raipur on 10 June 2022, down by around INR 200/t compared to the last assessment on 7 June. Around 5,000 t pellet (Fe 62/63) deal was heard in this publishing window at INR 7,650/t DAP Raipur. The index was seen hovering close to two-years low.

Coal

• Australian coking coal prices fell by $51/y w-o-w amid low buying interest and improved supplies. The latest price for the same on 10 June 2022 is assessed at $368/t FOB Australia and $398/t CNF India.
• Portside RB2 (5500 NAR) prices fell this week by INR 1,000-1,500/t at INR 19,000/t at Gangavaram Port amid weak buying appetite of sponge iron manufacturers and increased preference towards RB3 (4800 NAR) coal.
• South African RB1 prices fell by $12/t w-o-w to $315/t FOB as supplies eased post-derailment last week.

Ferrous scrap

• Indian mills actively booked fresh cargoes for HMS material at lower offers from Dubai, Yemen and West Africa. Meanwhile, imported scrap offers for HMS remained volatile throughout the week. However, offers gradually declined towards the weekend on falling steel prices.
• Mills believe prices have already bottomed out. As per SteelMint assessment, Europe-origin shredded scrap stood at $520/t CFR Nhava Sheva, unchanged w-o-w.
• Dubai-origin HMS 1&2 (80:20) scrap stood at $460/t CFR Nhava Sheva, down by $5/t w-o-w.

Ferro alloys

• Silico manganese (60-14) prices in India decreased steadily on persistent subdued demand as a result of market uncertainty. Based on SteelMint’s assessment on 10 June 2022, silico manganese prices decreased by INR 1,100/t to INR 78,900/t ex- Raipur, by INR 3,100/t to INR 80,800/t ex-Durgapur, and by INR 2,650/t to INR 78,600/t ex-Vizag on a weekly basis.
• In India, ferro manganese (HC70%) prices fell by INR 1,100/t w-o-w. Prices were almost range bound with marginal fluctuations due to lack of buying interest across regions. Prices for ferro manganese on 10 June 2022 were at INR 85,000/t ex- Durgapur and INR 87,000/t ex-Raipur.
• Indian ferro chrome (HC60%) prices dropped by INR 5,850/t w-o-w to INR 109,650/t exw-Jajpur due to declining buying interest amid bearish stainless-steel market, as assessed on 2 June.
• Indian ferro silicon (70%) prices fell by INR 3,000/t w-o-w to INR 125,000/t exw-Guwahati and Bhutan. As most market participants were in a wait-and-watch mode, ferro silicon prices in India declined due to limited demand.

Semi-finished

Semi-finished steel market saw moderate demand, leading to price fluctuations on floated offers through the mid sized mills.

Domestic billet prices fluctuated by INR 200-1,500/t tracking volatile sponge iron offers which varied by INR 200-1,000/t this week.

• SAIL held an auction for 4,000 t (two rakes) of steel grade pig iron on 8 June 2022 from Bokaro Steel Plant (BSL). The entire quantity was booked at a weighted average price of INR 43,000/t exw.
• Vedanta Resources cut foundry-grade pig iron prices by INR 1,500/t ($20) to INR 59,500/t delivered (DAP) to Ahmedabad and Kolhapur.
• Steel Authority of India Ltd (SAIL) held an auction for 7,000 t of basic pig iron (in 70 units) on 8 June 2022 from Rourkela Steel Plant (RSP). Buyers booked only 4,900 t (49 units) at a weighted average price of INR 43,000/t exw.
• Sponge iron export offers to Nepal fell slightly by $5-10/t, w-o-w to $405-410/t exw-eastern India, equivalent to $430-435/t CPT Nepal for FeM 79-80% material (70% lump and 30% fines).
• Indian sponge iron export offers to Bangladesh fell $10/t w-o-w to $390/t CPT Benapole. About 11,000 t of deals were reported this week.
• About four to five rakes (10,000-12,000t) t of BF-route billet deals were reported at around $640/t CPT Nepal.
• Indian steel grade pig iron prices fell slightly by INR 200-400/t w-o-w. Prices remained on the lower side on improved supply amidst lower export realisations.

Finished Long

India’s induction furnace-route finished long steel market witnessed limited buying enquiries and bulk trade. A sharp fall in prices of raw materials (iron ore and pellets) and high fluctuations in semi-finished steel prices weakened the market sentiments. Traders and buyers made need-based bookings and delayed bulk procurement.

Mills saw rising inventories which made them to adjust trade prices either reducing offers or offering trade discounts as per the movement of steel billet prices in key markets.

• As per SteelMint assessment, rebar prices were down in most of the markets by up to INR 2,000/t while in few other markets, prices were stable or increase up to INR 1,000/t.
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 49,700-50,100/t exw-Raipur and INR 53,500-54,000/t exw-Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at around INR 1,500-2,000/t. Trade reference prices of 200 mm angles stood at INR 54,000-54,600/t exw Raipur.
• Trade discounts given by Raipur-based wire rod suppliers were around INR 500-800/t and trade reference prices stood at INR 48,300-49,000/t exw-Raipur and INR 48,600-48,800/t exw-Durgapur, size 5.5 mm.

Finished flat

• Prices continued to move down in the flat steel product segment this week but at  slower pace compared to those in the past weeks. There are high expectations of a drop in market prices which kept buyers away from booking material in significant volumes.
• “Market sentiments remained weak, yet we see end-user industrial buyers and distribution network participants coming up with requirements,” said a reliable source. A rebound in demand is less likely as buyers are expecting prices to move down further, yet depletion of inventories build-up in end-February through mid-March amidst anticipation of steep price increases because of the Russian invasion of Ukraine, has pulled up some buying, he added.
• On the exports front, Indian steel majors came up with offers for alloyed (boron added) HRCs for Vietnam and the UAE markets after a two-week gap. There were no offers for EU while in Nepal, buyers are awaiting more clarity amidst the continual decline in Indian domestic flat steel market prices.
• SteelMint’s India HRC (SAE1006) export index assessment was assessed at $730/t FOB east coast India, steeply down by $91/t as against $821/t FOB before the export duty announcement.