Weekly round-up: Domestic steel market sentiments weaken further

The domestic steel market continued trending lower during week 45 (31 October-5 November, 2022). Semi-finished steel prices fell in the range of INR 550-2,000/tonne (t).

Domestic induction furnace finished long steel offers fell by INR 500-2,200/t w-o-w. Prices of finished flats also dropped in the range of INR 200-1,700/t.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 7,800/tonne (t) DAP Raipur, stable compared to the last assessment on 1 November despite lack of demand and fall in sponge iron prices.
• 48,000 t of iron ore fines (Fe56.5%) were booked at JSPL’s auction on 4 November, 2022. The material was from the company’s TRB mines in Odisha with the floor price set at INR 1,400/wet metric tonne (WMT) ex-mines (including royalty, DMF and NMET). The entire quantity was booked at the bid price of INR 1,400-1,420/WMT ex-mines (including royalty, DMF and NMET).
• JSW Steel Ltd (JSW) put up 221,200 t of iron ore fines (Fe 55-65%) for auction from Nuagaon and Jajang mines in Odisha on 3 November. The steelmaker received bids for the entire quantity at INR 1,460-3,510/t while floor prices for the auction were set at INR 1,400-3,200/t (inclusive of royalty, DMF and NMET charges).

Coal

• Australian hard coking coal prices rose by $4/t w-o-w to $316/t FOB and $334/t CNF India. Prices rose as wet weather in Australia led to supply concerns.
• Portside RB3 (4800 NAR) prices remained firm at INR 14,500/t at Vizag Port amid limited availability of stocks at port.
• South African RB1 (6000 NAR) prices fell further to $217/t, FOB down by $21/t amid limited European demand amid strong inventory build-up for winter.

Ferro Alloys

• According to SteelMint’s assessment on 4 November, Indian silico manganese prices were down by 4% w-o-w to INR 78,000/t ex-Durgapur, up by 3% to INR 77,200/t ex-Vizag, and down 2% w-o-w to INR 78,200/t ex-Raipur. Mild demand in both the domestic and international markets resulted in the drop.
• As on 4 November, Indian ferro manganese prices dropped around 3% w-o-w to INR 78,000/t ex-Durgapur and ex-Raipur at INR 78,000/t. Last week, demand for stainless steel and special steels slowed down although ferro manganese prices continued to drop.
• According to SteelMint’s assessment on 3 November, producers were offering at around INR 105,000-106,000/t exw Jajpur, indicating that the market remained rangebound w-o-w.
• Buyers were hesitant to reserve material at higher prices, so prices remained rangebound.
• After a major Bhutanese ferro silicon smelter reduced its offers to INR 125,000/tonne (t) on 4 November, Indian ferro silicon prices fell by INR 5,900/t w-o-w to around INR 125,000-126,000/t exw Guwahati.

Semi-Finished

Weak domestic demand and ongoing sluggish trends due to slight rise in inventories with suppliers continued to weigh on Indian IF-route steel prices. Domestic billets prices decreased by INR 1,000-2,000/t and sponge iron prices fell by INR 550-1,350/t w-o-w.

• Sponge iron export price assessment dropped by $5/t, w-o-w, to $430/t CPT Nepal, (FeM 80%, lumps 70%, fines 30%). Meanwhile, no fresh deals were heard for Bangladesh this week due to LC concerns along with frequent power outages. Offers for Bangladesh stand at $390/t CPT Benapole.
• Spot steel-grade pig iron prices dropped INR 500-1,300/t with a sharp fall of INR 1,300/t in the eastern region. Falling steel prices, improved domestic pig iron supply along with imports weighed on the pig iron market.
• About 25,000 t of Indonesian wire rod deals were reported for Nepal at around $560/t CFR Haldia, equivalent to $600-605/t CPT Nepal.

Finished Long

India’s induction furnace finished long steel market saw low buying enquiries throughout the week. The consistent downtrend in steel billets prices in the key markets of north and central India turned buyers inactive thereby impacting bulk purchases.

Only needs-based buying enquiries were seen in the spot market for finished long products whether rebar, structural steel or wire rods. Rising inventories at mills and slow lifting exerted pressure on manufacturers which led to decline in offers or attractive trade discounts depending upon payment and delivery terms.

• Rebar steel prices declined by INR 500-2,200/t w-o-w across all regions, as per 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 48,700-49,100/t exw Raipur, and INR 53,200-53,700/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were around INR 1,800-2,000/t and the trade reference price of 200 mm angles stood at INR 54,800-55,300/t exw Raipur.
• Trade discounts for wire rods offered by Raipur-based resellers were over INR 1,000/t and the trade reference price stood at INR 48,700-49,200/t exw Raipur and INR 48,300-48,500/t exw Durgapur for size 5.5 mm.
• Bf route Rebar prices saw mixed trends this week amid moderate demand in major markets. Market participants remained in wait-and-watch mode, awaiting price announcements from the tier-1 mills. In addition, buying interest in the north Indian provinces remained under pressure amid ban on construction and demolition activities in order to improve air quality.
• This week’s assessment for rebar (12-32 mm, BF-route, IS 1786, Fe500D) edged up by INR 200/t to INR 56,000-57,000/t exy-Mumbai, excluding GST at 18%.

Finished flat steel

• Trade-level prices of finished flat steel products dropped across markets this week amid limited activities post-Diwali holidays. HRC and CRC prices were hit the most, while a marginal decline was witnessed in GP. However, HR plates and PPGI remained rangebound.
• Moreover, major steel producers announced a rollover of list prices for November sales compared to October. Subsequent to the revision, list prices of HRC ranged between 57,000-58,500/t, while CRC was INR 64,100-66,500/t, depending upon the producer. List prices of GP at INR 67,500-68,800/t and PPGI at INR 79,500-80,000/t were also kept unchanged. Prices are on exy-Mumbai basis, excluding GST at 18%.
• “Demand for flat products remains mostly stable barring HRC and CRC which are under pressure over concerns regarding further decline in trade-level prices and improved supplies amid slow overseas trades,” informed sources.
• On the exports market SteelMint’s India HRC (SAE1006) continued to hover around $573/t FOB east coast this week. Alloyed HRC remains a major bone of contention for steel mills with 15% export duty on non-alloyed finished flat steel products. Furthermore, appreciation of the dollar against other currencies has led to increased competition with other exporting countries. “Low buying interest amid high energy prices and recessionary concerns are also keeping global prices under pressure,” a source said.