SteelMint | Morning Brief

Iron ore & pellets –

• SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index moved down by $2/t to $90/t FOB east coast India. The discounts for Indian low-grade ore are still at around 34-35% and are expected to increase in the coming days as demand for low-grade ore is weakening.
• OMC has scheduled its next iron ore e-auction for 1.38 mn t iron ore fines on 10 May ’21. The miner has increased the base price by upto INR 1,880/t against the last e-auction held on 10 Mar ’21.
• SAIL iron ore sales dropped sharply in April due to changes made in the MMDR Act. Auctions from SAIL mines in Odisha, scheduled on 20-21 Apr ’21, have been cancelled due to confusion regarding payment of additional amount as stipulated in the MMDR Amendment Act, 2021, a senior SAIL official informed SteelMint.
• SAIL conducted an auction yesterday for 40,000 t iron ore fines (Fe 56.3-58.1) from its Dalli/Rajhara mines in Chhattisgarh. They received bids for 24,000t material offered at INR 2,750-3,460/t (Loaded, including Royalty, DMF and NMET)
• Indian pellet export shipments were recorded at 1.33 mn t in Apr ’21, as per data maintained with SteelMint. China continued to remain the largest importer of Indian pellets in Apr at 0.89 mn t, down by 29% as against 1.26 mn t in the previous month.
• Southern India-based pellet maker – KIOCL has issued a pellet export sale tender for about 50,000 t (Fe 63.5% and Al 2-2.1%). The tender due date is 07 May ’21

Coal –

• Australian premium hard coking coal price increased by $1.50/t to $110.50/t FoB as the spot market saw four new transactions in the premium coking coal segment.

Scrap & Metallics-

• Turkey ferrous scrap import prices continued to climb to close to a five-month high as Turkey’s buyers are actively replenishing their scrap inventory before the Eid holidays. SteelMint’s assessment for US-origin HMS 1&2 (80:20) stands at $475/t CFR Turkey.
• SteelMint’s biweekly price assessment for containerized shredded scrap stands at $487/t CFR Port Qasim, up by $20/t w-o-w.
• China’s Shagang Steel raised scrap purchase prices by RMB 80/t ($12).
• SteelMint’s domestic steel scrap index fell slightly to INR 38,800/t DAP Mandi Gobindgarh. Limited buyers and sellers of melting scrap were seen active in the market. In addition to this, semi-finished steel reported minor corrections of upto INR 200-300/t on limited trades.
• SteelMint’s benchmark sponge iron (P-DRI) price fell by INR 200/t to INR 29,000/t ($393), exw Raipur, Central India. Falling billet prices and lower bids remained as the major factors behind softening sponge iron prices.

Semi-finished steel –

• Chinese domestic billet prices surged by RMB 140/t ($22) to RMB 5,130/t ($792/t) ex-Tangshan including 13% VAT. Although the billet transactions on 06 May remained moderate, the price rose following sharp increase in SHFE rebar futures post-Labour day holidays.
• Conversion spread from sponge iron to billet increased by 9% in Durgapur and 4% in Raipur m-o-m in Mar ’21, which further rose by 3-4% in both the locations in Apr. As per SteelMint, the monthly average conversion from sponge P-DRI to billet in Raipur stood at INR 11,800/t & in Durgapur at INR 13,350/t during Apr ’21.
• An Indian mill has concluded a 20,000 t BF-route billet (90*90mm) export tender for June shipment. The deal is heard to have been concluded at around $635/t, FoB India.
• SteelMint’s billet index dropped further by INR 500/t to INR 41,600/t exw Raipur on 06 May. A total of 2,300 t billet trades have been recorded as against 3,200 t the previous day. Trades remained slow due to weak demand, lower bids from local and outside buyers and falling billet prices in Punjab, Northern India.

Finished steel –

• Large integrated steel mills (both state-owned and private) have raised their finished steel prices by up to INR 3,000/t, trade sources reported to SteelMint. The current offer for rebar (12-32 mm) stands at INR 55,000-56,000/t ex-Mumbai, excluding GST.
• Crude steel production by Indian mills recorded a decrease of 17% m-o-m to 7.95 mn t in Apr ’21 as compared to 9.65 mn t in Mar ’21, according to Joint Plant Committee’s recent report.
• Tata Steel sales have hit a record high at 17.31 mn t in FY ’21 on the back of strong recovery in demand from end-users in H2. The volumes are up by 2% in comparison with 16.97 mn t in the previous fiscal.
• Pohang Iron and Steel Co. Ltd. (POSCO), Maharashtra unit has raised its CRC list prices by around INR 6,000/t for June ’21 delivery. The current price stands at around INR 82,500-83,000/t (exy-Mumbai), excluding GST @ 18%.

Ferro-Alloys –

• Turkish silicomanganese imports surged by 47.6% m-o-m in Mar ’21 in line with rising demand on account of higher crude steel production. Meanwhile, Turkey’s ferro-manganese imports fell by 25% m-o-m in Mar.
• Indian ferrosilicon prices have risen to a fourteen-year high owing to a severe supply crunch in the domestic market. Currently, the offer levels differ depending on the inventory available with the producers. In Bhutan, trade was concluded at around INR 118,000/t while in Guwahati prices were much higher with deals at around INR 121,500-122,000/t exw.