Weekly round-up: Semi-finished steel prices inch down on lacklustre demand

The domestic steel market witnessed a downtrend during week 30 ( 18-23 July, 2022). Semi-finished steel prices dropped in the range of INR 200-2,600/tonne (t).

Domestic induction furnace finished long steel offers declined by up to INR 3,100/t w-o-w. The trade reference prices for finished flats fluctuated in the range of INR 100-700/t for HRC and CRC.

Iron ore and pellets

• Odisha Mining Corporation’s (OMC) iron ore fines auction was held on 18 July. Out of 1.62 mnt put on offer, only 6,35,000 t (39%) received bids. The miner decreased the base price for fines marginally by up to INR 150/t for the auction and bid prices remained close to the set base price except for the Jilling lot.
• India’s pellet export market remained silent as overseas buying interest, particularly from China, remained low. The drop in iron ore and steel futures dampened pellet buying sentiments.
• NMDC scheduled two iron ore auctions from Chhattisgarh. The first is for 159,600 t of both fines and lumps (Fe64-67%, indicative) from the Bacheli mines, while the second is for 134,400 t of fines and lumps (Fe64-65.50%, indicative) from the Kirandul mines. Both are scheduled for 26 Jul’22.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,800/tonne (t) DAP Raipur on 22 July, down INR 100/t compared to the last assessment on 19 July. Only one deal was heard for Fe 62/63% at around 4,000-5,000 t reported at INR 8,650/t DAP Raipur.

Coal

• Australian premium hard coking coal prices fell by $12/t w-o-w to $226/t FOB and $250/t CNF India. Prices dropped because of weaker steel demand in Asia and Europe. Even heavy rains failed to provide support to prices this week.
• Portside RB3 (4800 NAR) prices eased to INR 15,800/t at Vizag Port this week mirroring a similar trend in import prices and limited bulk bookings in the domestic market due to the ongoing monsoon season.
• South African RB1 prices eased sharply to $301/t FOB as gas supplies resumed from Russia’s Nord Stream 1 pipeline to Europe.

Ferrous scrap

Indian imported scrap buyers resumed bookings of bulk cargoes recently. Around 32,000 t of mixed bulk cargo was booked from the USA. The cargo comprising 14,000 t of shredded, 10,000 t of bonus and 8,000 t of HMS 1&2 (80:20) was booked at an average price of $425-430/t CFR for two port discharges, Chennai and Kandla, sources informed. The drop in offers and weak buying in Turkiye resulted in suppliers remaining active in the South Asian markets.

• Negative market sentiments prevailed as market participants remained silent despite the continuous fall in imported scrap prices towards the weekend. However, limited container deals were heard at lower levels earlier in the week.
• SteelMint’s assessment of Europe-origin shredded scrap prices stood at $460-465/t CFR Nhava Sheva, down $30/t w-o-w.
• Dubai-origin HMS 1 fell to $465-470/t CFR, down $25/t w-o-w

Ferro alloys

• Domestic silico manganese (60-14) prices dropped by 3% w-o-w to INR 78,260 /t ex-Durgapur, INR 77,880/t ex-Vizag and INR 79,920/t ex-Raipur on a weekly basis. Prices decreased due to uncertain market sentiments amid lower demand.
• Indian ferro manganese (HC70%) prices fell by INR 1,770/t w-o-w to INR 82,890/t ex-Durgapur, while ex-Raipur prices fell by INR 540/t at INR 85,520/t on a weekly basis. The decline in prices was led by poor demand for stainless and special steels.
• Ferro chrome (HC60%) prices dropped by INR 1,200/t w-o-w to INR 102,300/t exw-Jajpur on 21 July. The decrease in prices was mainly because of weak demand from both the domestic and export markets.
• Ferro silicon (70%) prices fell by INR 4,550/t w-o-w to INR 144,700/t exw- Guwahati and prices dropped INR 2,200/t w-o-w to INR 146,100/t exw-Bhutan, as assessed on 22 July. Buyers bargained hard to book material, resulting in lower prices w-o-w.

Semi finished

Indian semi-finished steel prices decreased sharply, as per SteelMint assessment. Domestic billet prices fell by INR 1,000-2,600/t across regions with the major decline seen in Mumbai and Ramgarh. Low demand and falling billet prices weighed on sponge iron offers, as prices declined by INR 200-1,800/t.

• SAIL held an auction for 4,000 t of steel grade pig iron on 20 July from Rourkela Steel Plant (RSP) in which 1,900 t was booked at an average price of INR 46,575/t exw.
• In Q1FY’23, Lloyd Metals and Energy Limited (LMEL) a leading iron and steel company, produced 46,000 t of direct reduced iron (DRI), a considerable rise of 96% y-o-y as against 23,450 t in the same period last year.
• SAIL conducted an auction on 20 July for 4,000 t (two rakes) of steel grade pig iron from Bokaro Steel Plant (BSL) in Jharkhand. No bids were received against the base price of INR 46,200/t exw, sources informed.
• About 20,000 t of sponge iron export deals were reported this week to Nepal. Current offers hovered around $480/t CPT Nepal for FeM 79-80% material (70% lump and 30% fines).
• IF-route billet export offers fell by $30-35/t w-o-w to around $600-605/t exw-Durgapur, equivalent to $625-630/t CPT Nepal. About 1,200-1,500 t deals were reported this week.
• Two to three rakes (5,500-8,000 t) of BF-route billet export deals from eastern India-based mills were concluded this week to Nepal at an average price of $640/t CPT Nepal.
• Spot steel grade pig iron prices fell by INR 300-1,700/t, with a major drop of INR 1,400-1,700/t seen in the north and eastern regions due to the slump in billet prices.

Finished long

India’s IF finished long steel market saw slow movement across regions as weak buying enquiries and low transactions were observed throughout the week. High volatility in steel billet prices in key markets led traders and buyers to adopt a wait-and-watch policy for bulk procurement in an uncertain market. On the other hand, rising inventories at mills exerted pressure on suppliers which compelled them to reduce offers or offer attractive discounts in order to liquidate material in the spot market.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 50,800-51,200/t exw Raipur and INR 53,800-54,200/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were around INR 1,500/t and the trade reference price of 200 mm angle stood at INR 56,500-56,900/t exw Raipur.
• Trade reference prices for wire rod stood at INR 52,300-52,500/t exw Durgapur for size 5.5 mm.
• This week, blast furnace (BF) route rebar prices witnessed a downtrend owing to sluggish demand in the domestic market primarily due to lower consumption and adverse weather conditions in several parts of India. SteelMint’s weekly price assessment for rebar (12-32mm, BF, IS1786, Fe500D) stands at around INR 57,500-58,500/t ($720-732/t) on exy-Mumbai basis, down by INR 1,000/t ($13/t) w-o-w. Prices mentioned are exclusive of GST at 18%.

Finished flat

• Trade-level prices of flat steel products showed mixed trends this week, falling a little in some few markets while remaining rangebound in others. HRC and CRC prices were largely stable; however, plates and value-added coated steel products saw a drop in prices after remaining firm for a brief period.
• Towards the weekend, buying interest started weakening showing slight improvement over the past couple of weeks. 
• Meanwhile, as the month draws to a close buyers are slowly retreating to the sidelines as they are now waiting for mills to announce prices for next month. “Trade activity in the last 10 days of any month are generally slow amid weak market sentiments. Both buyers and sellers in the market are waiting for the mills to announce their prices for the next month,” a trader source informed SteelMint.
• The demand for HRC and CRC, although slow, has been comparatively better than demand for plates and coated steel products. The latter have seen very low movement in and out of the distribution channel as sellers are refraining from building up inventory in a scenario of slow end-user demand and falling prices.
• SteelMint’s India HRC (SAE1006, boron added) export index dropped steeply by $40/t this week to $600/t FOB east coast. Domestic mills are reducing prices in Vietnam and challenges in sealing deals for boron-added HRC to Europe and the UAE have dented export volumes. Thus, mills continue to scout these markets with reduced offers in a bid to conclude deals.