Weekly round-up: Semis market volatile even as finished flats prices inch up

The domestic steel market rose during week 38 ( 12-17 September, 2022). Semi-finished steel prices fluctuated in the range of INR 100-700/tonne (t).

Domestic induction furnace finished long steel offers witnessed a marginal hike; offers increased by INR 100- 600/t w-o-w. Trade reference prices for finished flat rose in the range of INR 100-1,500/t for HRC and CRC, However HRC prices witnessed a fall of INR 300/t in the Delhi region.

Iron ore and pellets

• State-run Odisha Mining Corporation (OMC) has scheduled an auction for iron ore fines and lumps on 19 September. Around 1.049 mnt of fines and 0.69 mnt of lumps will be put up for auction from OMC’s mines. The miner has decreased the base price for fines by up to INR 200/t whereas the base price for lumps remains unchanged against the last auction held on 19 August.
• Vedanta scheduled an auction today for sale of iron ore lumps from its A. Narrain mines in Karnataka’s Chitradurga district. According to market sources, the entire quantity of 12,000 t of lumps (Fe59.5%) was booked at a price of INR 4,621/t (exclusive of royalty, DMF and NMET), higher by INR 532/t compared to the floor price of INR 4,089/t.
• The spot price of iron ore in China dropped on 16 Sep’22 following the release of bearish macroeconomic data that weakened the country’s iron ore demand outlook. Benchmark Fe 62% fines prices decreased by $2.60/t to $98.45/t CFR China.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,100/tonne (t) DAP Raipur on 16 September 2022. The index remains stable compared to the last assessment on 9 September.

Coal

• Australian hard coking coal prices fell by $21/t w-o-w to $251/t FOB and $273/t CNF India. Global steel demand continues to remain sluggish with only two coming coal deals being concluded in last three weeks, providing limited support to coking coal prices.
• Portside RB3 (4800 NAR) prices remained largely unchanged at INR 13,700/t at Vizag Port amid small parcel trades by sponge iron manufacturers.
• South African RB1 (6000 NAR) prices fell further by $24/t w-o-w to $308/t FOB amid fall in global LNG prices this week following the European Union’s announcement to intervene in the energy market to cap rising natural gas prices.

Ferrous Scrap

• India’s imported scrap market remains active throughout the week, with bookings continuing to happen in small quantities. Whereas, there is a buzz that around 50,000 t bulk cargo booked from Europe/UK origin at an average price of $400/t CFR. Meanwhile, after the bunch of Turkish deals concluded earlier in the week, Indian buyers and steelmakers turned cautious due to limited finished steel sales and demand in the regional market.
• SteelMint’s assessment for shredded scrap in India stands at $450/t CFR Nhava Sheva, down $15-20/t w-o-w.
• The Dubai market mostly closed due to negative market sentiments from the last couple of days.

Ferro Alloys

• In SteelMint’s assessment on 16 September, Indian silico manganese prices were down by 2% w-o-w to INR 73,500/t ex-Durgapur, INR 73,500/t ex-Vizag, and INR 74,100/t ex-Raipur. Silico manganese demand continued to decline amid downtrend in domestic steel prices.
• As on 16 September, Indian ferro manganese prices dropped by 1% w-o-w to INR 76,500/t ex-Durgapur and ex-Raipur at INR 77,000/t. Ferro manganese prices declined due to weak demand continues in special steel.
• According to SteelMint’s assessment on 15 September, Ferro chrome (HC 60%) prices were at around INR 93,250/t exw-Jaipur, marginally up by INR 500/t due to improved demand in the domestic market.
• Indian ferro silicon (70%) prices fell marginally by INR 200/t w-o-w due to weak demand. According to SteelMint’s assessment on 19 September, Guwahati-based producers were offering at around INR 145,000/t exw, while Bhutan’s offers were at around INR 144,750/t exw.

Semi finished

The semi-finished steel market observed volatility in prices as demand was moderate which led to price fluctuation on floated offers through the mid-sized mills

Domestic billet prices fluctuated by INR 100-700/t following sponge iron offers also volatile by INR 100-550/t in a week trade.

• SAIL-Durgapur Steel Plant held an auction for 1,500 t of steel grade pig iron on 16 Sep’22. The auction failed to receive bids as the base price was high at INR 44,000/t exw.
• Tamil Nadu Electricity Regulatory Commission has raised power tariffs to INR 6.75/unit against INR 6.35/unit earlier. It has also revised demand charges from INR 3.50 to INR 5.50 per kilovolt ampere.
• Uttam Galva Metallics Limited has commissioned a new blast furnace with a melting capacity of 700,000 t per annum at Wardha Steel Complex, Maharashtra.
• Rourkela Steel Plant (SAIL) held an auction for 2,500 t of steel grade pig iron on 16 Sep’22. Around 2,400 t (96%) was booked at an average price of INR 43,488/t exw.
• SteelMint’s weekly price assessment of sponge iron exports to Nepal stable this week, with deals of about 7,500 t (including pellet-based and lump-based DRI) at around $470/t CPT Nepal for FeM 80% material (70% lump and 30% fines).
• Indian BF-route billet export offers fell to around $625-630/t CPT Nepal. However, no fresh deals were reported as Nepali mills turned to procuring Indonesian billets due to cheaper cost.
• Spot prices of steel grade pig iron fell by INR 200-800/t, w-o-w, with the highest drop of INR 800/t seen in the northern region, while in central and eastern India by INR 100-200/t.

Finished Long

India’s finished long steel manufacturers of induction furnace route observed lack of consistency in terms of trades and transactions on regular basis this week and only in the beginning of week some spot trades were noticed by which prices are also increased which got support from rising raw material prices. But again from mid of week buying enquiries for rebar, wire rods and structural steel was weak and no major trades are reported.

The price gap between long steel is shrinking between induction and blast furnace route which turned buyers very cautious on taking positions in procuring bulk material on higher offers. Although, the end of monsoon is expected to slightly improve demand while prices remain rangebound.

• On a weekly basis, prices in rebar steel witnessed a marginal increase of INR 100-600/t w-o-w, while in few markets prices remain stable throughout the week, as 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 51,600-52,000/t exw Raipur, INR 54,700-55,100/t exw Jalna.
• Trade discount given by Raipur- based heavy structural steel manufacturers is stood around at INR 1,800-2,000/t and trade reference price of 200 mm angles stood at INR 56,800-57,200/t exw Raipur.
• Trade discounts given by Raipur- based wire rod re-sellers is hovering over INR 1,000/t and trade reference prices stood at INR 51,500-52,000/t exw Raipur, INR 51,300-51,500/t exw Durgapur, size 5.5 mm.
• The activities continue to remain slow in the market from construction industries amid prolonged monsoons, which have weighed on the prices this week. Distribution network participants are not restocking at present because of the lack of clarity around prices, sources informed SteelMint.
• SteelMint’s weekly price of rebar (12-32mm, BF-route, IS 1786, Fe500D) was assessed slightly lower by INR 200/t ($3/t) at around INR 55,500-56,500/t ($696-709/t), on exy-Mumbai basis, exclusive of GST at 18%.

Finished Flat

• Trade level prices of finished flat steel products rebounded this week after an enlonged period of decline spanning April till early-September. Two of the steel majors have annonuced a mid-term increase of INR 500/t in their list prices for hot-rolled coils (HRC). Subsequent to the revision, prices of HRC (IS2062, 2.5-8mm) from these mills stand around INR 56,500/t exy-Mumbai, excluding GST @ 18%.
• Trade level prices of HR-plates and cold-rolled coils (CRC) also showed increase across markets. However, coated steel products have remained rangebound.
• A significant drop in prices over April till June had pulled back buyers from sidelines, and this continues. Inquiries and sales were reported to be moderate since the beginning of September, as buyers continue to procure but still at low volumes. However, coated steel products are still low in demand because of the seasonal factors.
• On the exports front, SteelMint’s India HRC (SAE1006) export Index increased marginally to $583/t FOB east coast as against $575/t FOB a week ago. Indian mills raised their quotes to $630/t CFR Vietnam, however, have maintained the levels of $630-640/t CFR UAE.
• Meanwhile, a few mills were also heard to have put their export offers on hold amid lucrative domestic prices.
  Also, mills have maintained offers for Turkiye at $650-660/t CFR and that to EU countries at $690-700/t CFR. Demand-supply dynamics have changed further after the recent natural disaster in South Korea. This would open more avenues for exports but Indian mills are restrained by the 15% export duty on non-alloyed HRCs.