Weekly round-up: Semi-finished steel prices witness uptrend even as flats edge lower

Domestic semi-finished steel prices edged up in the range of INR 500-2,900/tonne (t) during week 31 (25-30 July, 2022).

Domestic induction furnace finished long steel offers witnessed a upward trend, as offers surged INR 1,600/t w-o-w. The trade reference prices for finished flats, however, fell in the range of INR 100-1,800/t for HRC and CRC.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,900/tonne (t) DAP Raipur on 30 July. Around 40,000 t of pellet (FeFe 63%) deals were heard this week at around INR 8,950-/t DAP Raipur.
• Steel Authority of India Ltd (SAIL) had conducted two iron ore auctions on 26 July and 28 July which have been rescheduled for 4 August and 6 August due to some technical glitches.The material offered was iron ore fines (Fe 62.5% indicative) and iron ore dump fines (Fe 59% indicative) from Bolani mines in Odisha.
• The spot price of iron ore in China fell on 29 July as end-users remained cautious, waiting for the market sentiments to improve. Benchmark Fe 62% fines prices moved down by $3.95/t to $114/t CFR China. Participants in the seaborne iron ore market were uncertain about demand recovery.
• Sri Kumaraswamy Mineral Exports Private Limited (SKMEPL) had scheduled an auction on 29 July for sale of 154,370 t of iron ore from its Ramanadurga mines in Karnataka’s Bellary district. According to market sources, 32,000 t of lumps (Fe56.5-66%) were booked out of 60,000 t at around INR 2,426-4,363/t while only 6,370 t of fines (Fe50-66.5%) were booked out of 94,370 t at around INR 1,300-3,800/t (excluding royalty, DMF and NMET).

Coal

• Australian premium hard coking coal prices fell by $35/t w-o-w to $191/t FOB and $212/t CNF India. The decline was because of seasonal slowdown and drop in steel production, with steel mills across the globe showing no interest in spot purchases.
• Portside RB3 (4800 NAR) prices remained in a tight range of INR 15,400-15,800/t at Vizag Port this week as weak procurement demand from sponge iron manufacturers offset a sharp rise in imported prices.
• South African RB1 prices rose by $33/t w-o-w to $334/t FOB as Russian energy giant, Gazprom, drastically reduced its gas deliveries via the Nord Stream pipeline to about 20% of its capacity.

Ferrous Scrap

• India’s imported scrap prices edged up towards the weekend. Interestingly, imported scrap trade regained momentum due to cost-effectiveness of imported material compared to domestic prices. Moreover, supply shortage in the regional market drove imports higher.
• Meanwhile, suppliers were also interested to sell to India as the other scrap importing countries like Pakistan, Bangladesh and Turkiye were out of the market.
• Recently, a total of 4,000 t of shredded scrap of UK/Europe-origin was traded at $460-465/t CFR Nhava Sheva.
• Around 1,000 t HMS (80:20) of Poland origin was sold at $455/t CFR Nhava Sheva. In another transaction, around 1,500 t of Dubai HMS-1 was booked at $460/t CFR Nhava Sheva.

Ferro Alloys

• Indian silico manganese prices dropped by 3% w-o-w to INR 76,240 /t ex-Durgapur, INR 75,320/t ex-Vizag and INR 77,120/t ex-Raipur on a weekly basis. During this period of low demand, prices dropped due to uncertain market sentiments.
• Indian ferro manganese prices were down by INR 2,790 w-o-w to INR 80,100/t ex-Durgapur and ex-Raipur were down by INR 2920/t at INR 82,600/t with on weekly basis. Poor demand for stainless and special steel led to the fall in prices of ferro manganese.
• Indian ferro chrome prices plunged INR 2,300/t exw w-o-w to INR 100,000/t exw-Jajpur amid weak domestic and export demand as buyers delayed their purchases due to further price drops.
• According to SteelMint’s assessment on 29 July, offers of Indian producers remained stable w-o-w at around INR 144,600/t exw amid muted demand as many were waiting for the Bhutanese plants to release their new offers. However, offers by Bhutanese producers inched down by INR 1,100/t w-o-w to around INR 145,000/t exw.

Semi finished

Indian semi-finished steel prices increased, as per SteelMint assessment. Domestic billet prices increased by INR 1,000-2,600/t across regions with a major increase of INR 2,600/t seen in Raipur. Similarly, sponge iron prices also rose by INR 500-2,900/t w-o-w.

• SAIL-Rourkela Steel Plant held an auction for 4,000 t of steel grade pig iron on 29 July. The entire quantity was booked at an average price of INR 46,013/t exw.
• Vizag Steel has floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP) on FOB ST. delivery basis. The due date for the tender is 2 August.
• Odisha currently has 51 steel plants with a production capacity of 33.12 mnt/year. There are plans to add 12 more plants boosting the capacity by another 60 mnt/year, government sources informed.
• SAIL-Bokaro Steel Plant held two auctions for 4,000 t (2 rakes) and 150 t (by road) steel grade pig iron on 27 July. In both the auctions, the entire quantity received bids at around INR 45,100/t and INR 46,400/t exw, respectively.
• About 25,000 t (10-12 rakes) of sponge iron export deals were reported to Nepal this week. Current offers hovered at $480-485/t CPT Nepal for FeM 79-80% material (70% lump and 30% fines).
• Offers of BF-route billet remains stable at around $640/t CPT Nepal. However, no fresh deals were reported due to sizeable orders earlier.
• Spot steel grade pig iron prices rose by INR 200-1,700/t, with a major hike of INR 1,700/t seen in the eastern region, while an increase in prices by INR 200-1,000/t was witnessed in the central and northern regions.

Finished Long

India’s induction furnace finished long steel market observed highly volatile trends in terms of trades and transactions throughout the week which varied across regions. In central India moderate trades were observed in wire rod and rebar steel, due to consistently rising raw material costs, which prompted manufacturers to keep prices remain high, while buyers booked material as per requirement.

In other regions suppliers witnessed limited trades on a daily basis in the spot market although bulk bookings are still lacking because of seasonal factors as buyers are cautious about procuring hefty volumes, while in terms of prices they adjusted tradable discounts and offers as per the movement of steel billet and raw material (melting scrap and sponge iron) prices which remained high in the key markets.

• On a weekly basis, prices of rebar steel surged INR 400-1,600/t w-o-w across regions, SteelMint assessment shows.
•  The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 52,200-52,600/t exw Raipur and INR 54,900-55,300/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were around INR 1,000/t and the trade reference price of 200 mm angle stood at INR 58,800-59,200/t exw Raipur.
•  Trade discounts given by Raipur-based wire rod suppliers were around INR 1,000/t and the trade reference prices stood at INR 54,000-54,500/t exw Raipur and INR 53,800-54,000/t exw Durgapur for size 5.5 mm.
• This week, blast furnace (BF) route rebar prices dropped further by INR 1,000/t ($13/t) over the week because of slow demand and limited consumption from the construction sector during monsoon. SteelMint’s weekly price assessment of rebar (12-32mm, BF-route, IS 1786, Fe500D) stands at around INR 57,000-58,000/t ($720-732/t) on exy-Mumbai basis, exclusive of GST at 18%.
• On a monthly basis, prices have fallen by over INR 2,000/t ($25/t) to an average of INR 58,300/t ($736/t) in July as against INR 60,400/t ($763/t) in June. Consumption of rebar has improved m-o-m and a similar trend is expected in August. No downward correction is expected in August, a mill source informed.

Finished Flat

• The trade-level prices of products across the flat steel segment declined this week.
  “Trade activities were better in the first half of the month. However the buyers and sellers retreated to sidelines awaiting August price announcement by the mills,” informed a source.
• Mills have been adjusting to slow demand in the domestic and overseas markets. Meanwhile, distributors are engaged in needs-based procurement.
• Indian export offers for boron-added HRC have weakened further. Mills are facing difficulty in booking exports since the levy of export duty. SteelMint’s India HRC export index dropped by $17/t this week to $583/t FOB east coast, down by about $62/t from the level of $645/t assessed on 5 July.
• Nonetheless, a couple of days back a deal involving 25,000 t HRC (boron-added) was heard booked at $630/t CFR UAE for August and early-September shipment. However, this could not be confirmed till the time of publishing this report.