Weekly round up- Semi-finished market remains volatile, flat steel prices strong

The domestic steel market witnessed seesaw trend during week 1 ( 2 January- 7 January, 2023). Semi-finished steel prices fluctuated in the range of INR 50-1,500/tonne (t).

Domestic induction furnace finished long steel offers saw an upward price trend, offers increased by up to INR 1,000/t w-o-w. The trade reference prices for HRC and CRC increased in the range of INR 400-2,500/t across region.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 9,800/tonne (t) DAP Raipur, up by INR 150/t compared to the last assessment on 3 January, 2023. The market saw lower trading activities in the past couple of days. Around 3,000 t of deals were reported in this current publishing window.
• India’s top iron ore miner, NMDC, conducted an auction on 5 January, 2023 for nearly 222,600 t of iron ore from Bacheli mines in Chhattisgarh. The auction received a good response for lumps, with the entire quantity of DR-CLO getting booked. Bids for DR-CLO increased by around INR 400/t, while those for Baila fines and run of mine (ROM) ore remained at the base price level.
• India’s pellet export trades remained at a stable level compared to last week. SteelMint’s India pellet (Fe 63%, 3% Al) export index, FOB east coast, was assessed at $109/t, stable w-o-w. With most of the buyers yet to return from the New Year holidays, the market has remained silent.
• Vedanta conducted an auction for 40,000 t of iron ore lumps (6-40 mm, Fe57.75-58.25%) from its A. Narrain mines in Karnataka’s Chitradurga district on 4 January, 2023. According to sources, the entire material was sold at INR 3,560-3,736/t against the base price of INR 3,510-3,516/t. Prices were exclusive of royalty, DMF, and NMET charges.
• NMDC increased the list prices of iron ore on 1 January, 2023. The company raised prices of lump ores by up to INR 500-600/t and fines by INR 500/t, effective from 1 January. Moreover, NMDC fixed prices for lump iron ore (65.5%, 6-40mm) at INR 4,600/t, DR CLO (Fe 67%, 10-40mm) at INR 5,520/t and iron fines (64% – 10mm) at INR 3,410/t (FoR prices from Bacheli complex, excluding royalty, DMF and NMET).

Coal

• Australian hard coking coal prices rose by $10/t to $314/t FOB and $327/t CNF India. This has happened due to positive demand sentiments as China has allowed 4 firms to resume coal imports from Australia.
• Portside RB3 (4800 kcal/kg NAR) grade coal prices fell by INR 400-500/t to INR 12,200/t ex-Vizag with a fall in demand from sponge iron sector.
• High-CV RB1 (6000 kcal/kg NAR) grade coal prices fell marginally by $9/t to $198/t FOB amid muted demand in the market.

Ferrous Scrap

• Indian mills are active as the market resumed after the winter holidays. However, imported scrap prices moved up on the back of increased inquiries from buyers and active deals concluded by Turkiye.
• Meanwhile, a Kandla-based major mill booked 40,000 t of bulk scrap cargo from the US at $450/t CFR levels for the early February shipments heard this week from a major Indian mill. Many deals were recorded for containerised material.
• SteelMint’s assessment for Europe-origin shredded was recorded at $455-458/t CFR, up by $10/t w-o-w.

Ferro Alloys

• As on 6 January 2023, Indian silico manganese prices rose by 5-6% w-o-w to INR 83,000 exw Durgapur and INR 83,300/t exw Raipur. The hike in prices was due to rising costs of raw materials and consequent high operating rate of producers.
• Indian ferro manganese prices increased by 9% w-o-w to around INR 80,500/t exw Durgapur and INR 81,600/t exw Raipur, assessed on 6 January 2023. Supply-demand mismatch and growing steel demand supported ferro manganese prices.
• As per SteelMint’s assessment on 5 January, ferro chrome offers were hovering around INR 103,000-105,000/t exw-Jajpur. Indian ferro chrome prices were on uptrend due to good export demand from the export markets after the Chinese stainless-steel mills’ tenders declared hike in purchase prices for January 2023.
• Indian ferro silicon prices were offering at around INR 118,000/t exw Guwahati, while Bhutan’s offers remained stable w-o-w at INR 120,000/t exw, according to SteelMint’s assessment on 6 January. Moderate demand kept prices stable this week.

Semi-finished

Semi-finished steel market observed volatility in prices as demand was moderate during these days. This led to price fluctuations on floated offers through mid-sized mills.

Domestic sponge iron prices fluctuated by INR 50-550/t, while billet offers increased by INR 150-1,500/t in a weak trade except in Mandi Gobindgarh, where prices declined by INR 400-500/t w-o-w.

• SAIL-Durgapur Steel Plant held an auction for 1,500 t of steel grade pig iron on 6 January, 2023. The entire quantity was booked at an average price of INR 43,400/t exw.
• State-owned Vizag Steel has floated two ocean sale export tenders – one for 10,000 t of wire rod coils (5.5-16mm, SAE-1008/1010/1012/1012S/1018) and the other for 20,000 t of steel billets (90x90mm, C20MMn Gr. A). The due date for both tenders is 10 January and the delivery is scheduled for 26 February.
• Vizag Steel has also floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP) on FOB ST delivery against 100% advance payment terms. The due date of the tender is 9 January and the delivery is scheduled for 25 February.
• Tata Metaliks raised pig iron (both basic and foundry grades) prices by INR 1,500/t ($18t). Fresh offers for foundry grade are at INR 48,000/t and basic grade (Si 1.0-1.5%) at INR 45,000/t exw-Kharagpur. Prices are exw-Kharagpur and applicable for Kolkata and Howrah markets.

Finished long

India’s IF-route finished long steel market witnessed limited trades throughout the week. Suppliers received bulk bookings in the previous week which prompted them to increase prices. In addition, simultaneous hikes in prices announced by primary mills supported the rising price trend in the secondary market.

However, limited buying enquiries were prominent at higher offers. Manufacturers were offering a discount as per quantity and payment terms in order to push sales. Meanwhile, during daily trading session, overall prices in rebar, structure, and wire rod steel remained volatile, due to fluctuations in the price of semi-finished steel specifically in the northern and central regions.

Rebar steel prices increased by INR 200-1,000/t in various regions, while in few markets like Raipur, Jaipur and Hyderabad prices remained stable, as per SteelMint’s assessment.

• The trade reference price of Fe 500 grade rebar manufactured via the IF-route for 10-25 mm size was assessed at INR 51,000-51,400/t exw Raipur, and INR 56,000-56,500/t exw Jalna.
• Trade discount given by Raipur-based heavy structural steel manufacturers was over INR 2,000/t and trade reference price of 200 mm angles stood at INR 57,300-57,700/t exw Raipur.
• Trade discounts in Raipur wire rod by resellers were over INR 1,000/t and trade reference price at INR 51,000-51,500/t exw Raipur and INR 51,300-51,700/t exw Durgapur, size 5.5 mm.
• Trade prices of rebars made through blast furnace (BF)-route saw a sharp rise of around INR 1,500-2,400/t w-o-w across various markets, followed by an announcement of a hike by up to INR 3,000/t in list prices by primary steel mills. Mills are still having low inventories at their yards which is leading to a supply-demand imbalance in the distribution network. Furthermore, buying activities shall resume fully by next week as market participants will be back from New Year holidays.
• SteelMint’s weekly price assessment for rebars (12-32 mm, BF-route, IS 1786, Fe500D) jumped by INR 1,800/t w-o-w to INR 59,400/t, exy-Mumbai, excluding GST at 18%.

Finished flat

• Trade reference prices of flat steel products continued to increase this week. CRC prices among others increased by a lesser quantum because of comparatively better availability, sources shared.
• Another major reason was the list price hike announced by major producers for January sales earlier this week.
• As far as exports are concerned, Indian mills are likely to come up with fresh offers in the upcoming week, informed a reliable source. Mills had been waiting for the domestic price announcement, he added. SteelMint’s HRC (SAE1006) export index for the current week stood range-bound at $600/t FOB east coast.