Weekly round Up- Semi-finished steel market remains volatile on subdued demand

The domestic steel market remained volatile during week 43 ( 17 Oct- 22 October). Semi-finished steel prices fluctuated in the range of INR 100-1,300/tonne (t).

Domestic induction furnace finished long steel market witnessed a price fluctuation of INR 100-500/t w-o-w. The trade reference prices for finished flats declined in the range of INR 100-700/t for HRC and CRC.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,000/tonne (t) stable compared to the last assessment on 18 October. Limited deals were reported in this publishing window. Increased sponge prices and quite a decent response in the OMC iron ore auction has kept offers supported.
• State PSU miner OMC conducted an iron ore auction on 19 October. Around 1.434 mnt, or 81% of the total quantity put on offer (1.761 mnt), received bids. Tight availability of high-grade ore fines, lower inventories with mills and higher pellets offers in eastern India made the auction a success.
• Vedanta scheduled an auction on 21 Oct’22 for sale of 116,000 t of iron ore from its A. Narrain mines in Karnataka’s Chitradurga district. According to market sources, the entire quantity of 100,000 t of fines (Fe57.5%) and 16,000 t of lumps (Fe58-60%) were booked at the base price of INR 1,325/t and INR 3,899/t (excluding royalty, DMF and NMET charges). Prices have remained largely stable against the company’s last auction.
• Steel Authority of India Ltd (SAIL) put up 40,000 t of iron ore dump fines (Fe 59%-indicative) for sale via auction from Bolani mines in Odisha on 20 October. The entire quantity received bids at INR 2,350/t (ex-mines, including royalty, DMF, NMET, and extra premium). The same grade of iron ore was last sold on 11 Oct at INR 2,300/t.

Coal

• Portside RB3 (4800 NAR) prices remained stable at INR 14,300/t at Vizag Port amid lower trade ahead of Diwali festivities.
• South African RB1 (6000 NAR) prices fell by $4/t w-o-w to $248/t FOB amid limited European enquiries. Transnet has reached an agreement with the union for a three-year wage deal. However, a locomotive derailment is being heard on Transnet’s main line to RBCT Port which is affecting coal deliveries.
• Australian hard coking coal prices rose by $12/t w-o-w to $299/t FOB and $321/t CNF India. Prices rose as heavy rains in Australia affected mining activities leading to supply disruption. However, steel demand continues to remain weak globally.

Ferrous Scrap

• On the account of the upcoming Diwali holidays, the Indian scrap market turned weak on limited buying activities and currency devaluation. Industry participants informed that buyers are booking only hand to mouth. Despite lack of demand a few bulk scrap bookings were heard in the week from the UK.
• Around 44,000 t of mixed scrap material was booked from the UK. Out of this, 15,000 t of busheling scrap was traded at $450/t, 6,500 t of blue steel at $435/t, 8,000 t of bonus at $425/t and 14,500 t of shredded at $425/t, CFR Chennai.
• Shredded assessment for UK-origin material stands at $445-450/t CFR levels.

Ferro Alloys

• As per SteelMint’s assessment on 21 October, Indian silico manganese prices were up by 7-8% w-o-w to INR 78,800/t ex-Durgapur, INR 76,400/t ex-Vizag, and INR 78,400/t ex-Raipur w-o-w. Rise in prices due to shortages in supplies and an increase in domestic and overseas demand.
• As on 21 October, Indian ferro manganese prices rose around 2% w-o-w to INR 76,300/t ex-Durgapur and ex-Raipur at INR 76,000/t. Special steels and stainless steels have shown improved demand last week. So, ferro manganese prices increased marginally.
• According to SteelMint’s assessment on 20 October, Indian ferro chrome prices increased by around INR 3,600/tonne (t) w-o-w to around INR 101,000-103,000/t exw-Jajpur depending. However, producers began offering at INR 103,000/t after the good response in OMC’s chrome ore auction on 19 October.
• Indian ferro silicon prices inched down due to weak demand. According to our assessment on 21 October, Guwahati producers’ offer were at around INR 130,400/texw and Bhutan producers were offering at around INR 133,200/t exw.

Semi finished

On a weekly basis, domestic sponge iron prices increased by INR 200-800/t across regions, with the major rise in prices being reported in Raipur and Jharsuguda by INR 700-800/t. However, the billet market observed volatility in prices by INR 100-1,300/t due to fluctuating demand.

• Rourkela Steel Plant (SAIL) held an auction for 1,000 t of steel grade pig iron on 21 October. The entire quantity was booked at an average price of INR 42,700/t exw.
• SAIL’s Bhilai Steel Plant (BSP) held an auction for 5,000 t of steel grade pig iron on 20 October. The bids ranged between INR 42,500-43,050/t exw; however, the company rejected bids less than INR 43,000/t. Bids were approved for a total quantity of 1,800 t at INR 43,000-43,050/t exw.
• Tata Metaliks posted a 23% q-o-q increase in pig iron sales volume in July-September (Q2FY23). The company’s ductile iron (DI) pipe sales also increased by 52% q-o-q.
• Sponge iron export price assessment remains fell to around $430-435/t CPT Nepal, (FeM 80%, lumps 70%, fines 30%). Only about 1,250 t of deals were concluded this week.
• Spot steel grade pig iron prices fell by INR 600-900/t in central, east and northern regions. Prices remained under pressure on account of improved supply in the spot market.

Finished Long

India’s induction furnace finished long steel market observed a limited buying enquiries throughout the week as well as lower trade volumes. A downside movement was seen in raw material prices in the early part of the week which impacted demand for rebar, structural steel and wire rod due to higher prices. Buyers turned cautious on taking positions. In a few markets manufacturers also saw minor selling pressure due to rising inventories at mills ahead of the festive holidays.

• On a weekly basis, rebar steel prices dropped by INR 100-500/t in most of the markets while in a few markets in the eastern region prices rose by INR 100-300/t w-o-w, as SteelMint assessment.
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 50,700-51,100/t exw Raipur, INR 54,300-54,800/t exw Jalna.
• Trade discount sgiven by Raipur- based heavy structural steel manufacturers stood at INR 1,500/t and the trade reference price of 200 mm angles stood at INR 57,100-57,500/t exw Raipur.
• Trade discounts given by Raipur- based steel wire rod suppliers stood at around INR 500-800/t and the trade reference price was at INR 51,200-51,600/t exw Raipur and INR 50,800-51,000/t exw Durgapur for 5.5 mm material.
• Prices of blast furnace route rebar showed mixed trends this week despite slowing activites ahead of the festival. 
• The assessment for rebar (12-32mm, BF-route, IS 1786, Fe500D) edged up by INR 100/t w-o-w and stood around INR 56,000-57,000/t exy-Mumbai, excluding GST at 18%.

Finished Flat

• Trade-level prices of finished flat steel products continued to remain under pressure in the week ending 22 October. Barring prices of pre-painted galvanised (PPGI) and bare galvalume (BGL) coils, which remained unchanged, other products have dropped this week by about 300-700/t in the key market – Mumbai.
• Market participants moved to the sidelines ahead of the Diwali festival. Furthermore, restocking demand too remained slow as most participants had stocked up ahead of the price rise announced by mills for October.
• HR-plates (E50) continued to register decent demand for above 20mm thickness from most of the end-industrial consumers. Moreover, there are some concerns over availability for plates above 40mm thickness which has kept their trade level prices supported during the week, sources informed.
• On the exports front, SteelMint’s India HRC (SAE1006) export index dropped further by $7/t w-o-w to $573/t FOB east coast India this week. The same had dropped by $3/t a week back. Buying interest continued to remain weak for alloyed HRC in the overseas markets, whereas competition increased with other countries reducing their offers amid an appreciating dollar and slower domestic demand. Furthermore, there were few indications from mills ahead of Diwali.