Weekly round-up: Domestic semis market remains volatile amid soft steel demand

The domestic steel market remained volatile  during week 32 (1-6 August, 2022). Semi-finished steel prices fluctuated in the range of INR 100-1,300/tonne (t).

Domestic induction furnace finished long steel offers fell by up to INR 1,300/t w-o-w. The trade reference prices for finished flats fell in the range of INR 100-1700/t for HRC and CRC.

Iron ore and pellets

• Vedanta subsidiary Electrosteel Steels Ltd (ESL) had scheduled an auction for sale of around 400,000 t of iron ore fines (Fe57.5-59.5%) on 5 August from its Nadidih BICO and Feegrade mines in Odisha’s Keonjhar district. According to market sources, 50,000 t (Fe57.50%) and 350,000 t (Fe59.50%) of iron ore fines were booked at around INR 1,250-1,300/t and INR 1,750-1,800/t, respectively. Prices include royalty, EMF and NMET charges.
• The spot price of iron ore in China rose on 5 August as trading activity in the steel market increased. Benchmark Fe 62% fines prices moved up by $3.15/t to $106.95/t CFR China.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 9,200/tonne (t) DAP Raipur on 5 August, up INR 100/t compared to the last assessment on 2 August. The index edged up as a deal was concluded at increased offers.

Coal

• Australian premium hard coking coal prices rose by $12/t w-o-w to $203/t FOB and $222/t CNF India. Indian coking coal demand has gradually improved with prices falling in the international market.
• Portside RB2 (5500 NAR) prices fell by INR 200/t this week to INR 17,700/t amid easing imported coal prices and weak procurement demand by sponge iron manufacturers.
• South African RB1 prices fell by $35/t w-o-w to $299/t FOB as elevated global LNG prices eased with stable gas flows from Russia this week to Europe and record LNG output in the USA.

Ferrous Scrap

• India’s imported scrap bookings in containers and bulk continued this week on the back of improved demand for finished steel and strong domestic scrap prices due to shortage of material in the domestic market.
• A total of 48,000 t of mixed bulk cargo of UK origin, comprising shredded and HMS, was booked at an average price of $405/t CFR Chennai. In another deal, a cargo of 22,000 t of USA-origin shredded and PNS, and 11,000 t of HMS, was traded at an average price of $409/t, CFR Chennai.
• SteelMint’s assessment of containerised Europe-origin shredded scrap stands at $480/t CFR Nhava Sheva, up $15-20/t w-o-w.
• Dubai-origin HMS 1 is being offered at $495-500/t CFR Nhava Sheva.

Ferro alloys

• As per SteelMint assessment on 4 August, Indian silico manganese prices were rangebound w-o-w at INR 74,000/t ex-Durgapur, INR 74900/t ex-Vizag, and INR 76100/t ex-Raipur. Low inquiries in the domestic market kept prices stable during this period.
• On 4 August, Indian ferro manganese prices fell by 2% w-o-w to INR 78,500/t ex-Durgapur and ex-Raipur at INR 79,800/t. The drop in special steel demand led to the fall in prices of ferro manganese.
• According to SteelMint assessment on 4 August, Indian domestic ferro chrome prices fell by INR 3,500/t w-o-w to INR 96500/t exw-Jajpur amid sluggish demand as buyers were waiting for Vedanta’s ferro chrome auction. Dull demand from China also led to the drop in ferro chrome prices.
• Bhutan’s ferro silicon weekly average prices remained stable at INR 142,300/t this week amid healthy bookings from buyers in the beginning of the month. However, India’s weekly average prices fell by INR 7,200/t to INR 137,500/t exw, as assessed on 5 August.

Semi finished

The semi-finished steel market observed volatility in prices as demand was moderate this week which led to price fluctuations.

Domestic billet prices fluctuated in the range of INR 500-1,200/t as sponge iron offers fluctuated in the INR 100-1,300/t range.

• SAIL-Durgapur Steel Plant held an auction for 2,500 t of steel grade pig iron on 29 July. The entire quantity was booked at an average price of INR 46,228/t exw.
• SAIL has scheduled an auction for 11,000 t (60 kg) and 500 t (52 k) full length commercial rails from Bhilai Steel Plant (BSP) in Chhattisgarh on 8 August.
• Jindal Power resumed 12 hours of power supply to the Punjipathra, Raigarh (Chhattisgarh)-based induction furnaces from 31 July midnight, SteelMint learnt from sources.
• At SAIL’s 4,000 t steel grade pig iron auction on 3 August from the Rourkela Steel Plant, buyers booked the entire quantity at an average price of INR 46,821/t exw. Another auction on the same day from the Bokaro Steel Plant for 4,600 t of pig iron received bids at around INR 46,050/t exw.
• About 8,000 t (3 rakes) of sponge iron export deals were reported to Nepal this week. Current offers hovered around $490/t CPT Nepal for FeM 79-80% material (70% lump and 30% fines).
• Two-three rakes of BF-route billet deals were reported at around $630/t LTW-eastern India, equivalent to $640-645/t CPT Nepal.
• Spot prices of steel grade pig iron fell in the range of INR 100-700/t, with a major drop of INR 700/t seen in the northern and eastern regions. Declining steel prices weighed on the pig iron market.

Finished Long

India’s induction furnace finished long steel market remained volatile in terms of prices and saw limited trades and transactions this week, which varied across regions. As raw material prices remained tight and moderate bookings were recorded for rebar early on in the week, suppliers quoted rebar offers at the higher side. However, lower demand in the spot market later on in the week amid absence of bulk deals was observed as traders and retailers adopted a cautious approach. Manufacturers had to adjust trade discounts in the spot market as per raw material price movements.

• On a weekly basis, prices of rebar steel dropped in the range of INR 200-1,300/t w-o-w in most markets, while some markets in south and north India remained stable. However, rebar prices in Mumbai increased by INR 1,800/t w-o-w, as per SteelMint assessment.
•  The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25mm size was assessed at INR 51,200-51,600/t exw Raipur and INR 55,500-56,000/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were around INR 1,000-1,200/t, while the trade reference price for 200mm angles stood at INR 57,600-58,000/t exw Raipur.
•  The trade reference prices for IF-route steel wire rod stood at INR 52,600-53,000/t exw Durgapur for size 5.5mm.
• Indian primary steel producers rolled over list prices of rebar (BF-route) due to weak domestic demand during the rainy season as a result of construction activities slowing down amid logistical logjams. Current list prices of major steel producers for early-August sales are hovering around INR 58,500-59,000/t ($736-743/t) on a delivered Delhi basis, excluding GST at 18%.
• SteelMint’s weekly assessment of rebar (12-32mm, BF-route, IS 1786, Fe500D) stands at around INR 57,000-57,500/t ($718-724/t) exy-Mumbai, excluding GST at 18%.

Finished Flat

• Indian steel majors lowered their list prices of hot-rolled coil (HRC) by up to INR 3,500/t ($44/t) and cold-rolled coil (CRC) by up to INR 2,650/t ($34/t) for early-August sales compared to prices prevailing last month. Post revision, prices of HRC (IS2062, 2.5-8mm) are in the range of INR 58,000-58,500/t ($733-740/t) and CRC (IS513 Gr O, 0.9mm) at INR 65,350-66,500/t ($826-841/t) depending upon mills. Prices are on an exy-Mumbai basis, excluding GST at 18%.
• SteelMint’s benchmark price assessment for HRC (IS2062, 2.5-8mm) fell by INR 400/t ($5/t) w-o-w at INR 57,000-58,000/t ($721-733/t), while CRC (IS513 Gr O, 0.9mm) prices are at INR 67,000-68,000/t ($847-860/t), down INR 100/t ($1.3/t) w-o-w. Prices are on exy-Mumbai basis, excluding GST at 18%.
• Overseas trade has taken a hit since the government announced export duty of 15% on clad or plated non-alloyed steel products in late May. SteelMint’s India HRC export index was assessed at $565/t FOB east coast India, down $18/t w-o-w.
• Most steel manufacturers have been curtailing their production volumes since mid-July to counter the impact of slow demand and continual decline in prices in the overseas and domestic markets. Industry participants opine that prices are expected to stabilise now as there has not been any major drop in July barring the decline in prices last week.