Weekly round-up: Domestic steel market rebounds on improved sentiments

The semi-finished steel market witnessed a supportive trend during week 2 (3 Jan’22 – 8 Jan’22). Domestic billet and sponge iron offers increased by INR 400-1,300/tonne across regions.

India’s induction-route finished long steel mills observed moderate trade enquiries and transactions in the spot market. Rebar prices moved up by INR 200-1,100/t during the week, however a marginal drop of INR 300/t was also noticed in some markets.

Indian finihed flats market remained little supportive throughout the week as producers announced a rollover in their list prices for Jan’22.

Iron ore and pellets

• The Directorate of Mines and Geology (DMG) of Goa plans to conduct the 27th e-auction for 2.17 million tonnes (mn t) of iron ore.
• The Indian pellet export market has gained momentum following the hike in global iron ore prices. Over 270,000 t of pellet export deals were concluded in last 3 days. SteelMint’s India pellet export index (Fe 64%, 3% Al, FOB east coast) increased by $2.5/tonne (t) on a w-o-w basis to $136.5/t.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 10,800/t DAP Raipur on 7 Jan’22, up INR 100/t against the last assessment on 4 Jan’22. Around 17,000 t deals were reported this week.
• SteelMint’s weekly index for India low-grade iron ore fines (Fe 57%) exports inched up $1/t to $35/t FOB east coast India. India’s iron ore export market continued to remain inactive on bid-offer disparities.

Coal

• Australian premium low-volatile hard coking coal FOB prices rose by $2/t w-o-w basis amid tight supply.
• Weather-related concerns in Australia continued to weigh on market sentiments. Offers in the spot market were limited.
• Enquiries were heard from India for premium coking coal but no deal was reported to have been concluded.
• Latest prices for the premium HCC grade are assessed at around $359/t FOB Australia and $381/t CNF India.
• No major portside deals were heard for RB2 as sellers held up the limited stock they have in anticipation of a further price rise. RB3 deals were heard at INR 10,4000/t.
• South African RB1 prices for Jan’22 surged by $30/t to $155/t. Discounts for RB2 and RB3 were assessed at $12/t and $27/t respectively.

Ferrous scrap

Indian imported HMS scrap trade picked up this week considering the uptrend in global scrap prices and active Turkish bulk cargo bookings. However, deals for shredded scrap continued to remain low on higher bids from the neighbouring markets, Pakistan and Bangladesh.

Fresh offers –

• Indications for UK-origin shredded were heard at $540-545/t CFR. Buyers were not interested in booking the material at a higher price, SteelMint understands.
• Fresh offers for Dubai-origin HMS 1&2 (80:20) and HMS 1 stood at $470/t and $475-480/t CFR Nhava Sheva respectively, up by $10/t w-o-w.
• Around 7,000 t of UAE-origin HMS 1&2 (80:20) was booked by Western India-based mills on high seas at $435-455/t CFR basis, earlier in the week.
• Around 4,500 t of HMS 1&2 (80:20) from South Africa was booked at $475/t CFR basis.

Ferro alloys

The overall market saw a mixed trend as prices of manganese alloys and ferro silicon inched up marginally w-o-w, while ferro chrome and ferro silicon prices dropped.

• Indian silico manganese prices inched up marginally owing to moderate demand from the domestic market. Exporters received fewer inquiries this week from seaborne buyers due to the New Year holidays. According to SteelMint’s assessment on 07 Jan’22, prices of 60-14 grades were hovering around INR 97,550 – 99,200/t exw from both Durgapur and Raipur.
• Indian ferro manganese (HC70%) prices are hovering at around INR 99,000-100,000/t exw from both Durgapur and Raipur, a marginal increase w-o-w, as assessed on 07 Jan’22. Low demand from the market kept prices range-bound on a weekly basis.
• Indian ferro chrome (HC60%) prices lowered by INR 2,700/t to INR 96,500/t exw-Jajpur, as assessed on 5 Jan’22. Muted demand from the Chinese market owing to stainless steel production cuts in China lowered the Indian ferro chrome prices w-o-w.
• Indian ferro silicon prices dropped w-o-w as Guwahati’s producers maintained price parity with Bhutan’s producers despite low inventory in hand. Currently, Indian ferro silicon (70%) is being offered at INR 159,500/t exw- Guwahati.

Semi finished

As per SteelMint’s assessment, the domestic billet prices have increased by INR 400-1,000/t across regions with a major increase of INR 800-1,000/t seen in Raipur and Jalna. Similarly, sponge iron prices also rose by INR 200-1,300/t w-o-w.

• Vizag Steel scheduled an e-auction for around 1,800 t of pooled iron on 10 Jan’22.
• SAIL conducted an auction on 6 Jan’22 for 6,000 t of basic grade pig iron from Bhilai Steel Plant (BSP). The entire quantity was booked at a weighted average price of INR 38,750/t exw.
• Vizag Steel Plant has floated a spot sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP grade) with the due date being 6 Jan’22.
• Tata Metaliks increased basic grade pig iron prices by 3% i.e. INR 1,200/t ($16/t). Fresh prices stand at INR 42,800/t. Prices are exw-Kharagpur and applicable for Kolkata and Howrah markets.
• SAIL held an auction for 8,500 t of basic grade pig iron (in 85 units) on 5 Jan’22 from the Rourkela Steel Plant (RSP) in Odisha. The entire quantity was booked at a weighted average price of INR 37,950/t exw.
• A steel mill booked two-three rakes of BF billets for exports to Nepal at around $620/t, while the revised offers reported at around $625-630/t, CPT Raxaul border.
• Induction furnace grade billet export offers were reported at $595-600/t exw-Durgapur, equivalent to $620-625/t CPT Nepal. These offers increased by $15/t, w-o-w.
• Around 5,000 t of sponge iron (lumps 100%, FeM 80%) export deals were reported to Bangladesh at around $440/t CPT Benapole, equivalent to $470/t CFR Chittagong.

Finished longs

Domestic induction-route finished long steel manufactures observed moderate spot trade enquiries and transactions this week. Rebar steel prices, in most of the markets, increased by INR 200-1,100/t, w-o-w, while in few other markets, marginal corrections were also noticed by up to INR 300/t. Moderate sentiments in the market and rise in raw material prices resulted in the rise in prices of long steel.

• The trade reference price of Fe 500 grade rebar steel manufactured via IF-route for 10-25 mm size was assessed at INR 46,700-47,100/t exw-Raipur and INR 50,700-51,100/t exw-Jalna.
• Trade discount given by Raipur-based heavy structural steel manufacturers was in the range of INR 800-1,000/t. Trade reference price of 200 mm angle stood at INR 52,000-52,400/t exw-Raipur.
• Trade discounts given by Raipur-based wire rod suppliers were hovering around INR 600-900/t. Trade reference prices stood at INR 47,200-47,500/t exw Raipur and INR 47,800-48,000/t exw Durgapur for size 5.5 mm material.

Finished flats

• Indian steel producers announced a rollover in their list prices for Jan’22 sales with prices of HRC at $64,000-64,500/t ($862-869/t) and those of CRC at $70,000-71,000/t ($943-956/t). This boosted the market sentiments a bit this week. However, it is important to note that the list prices of HRCs were down by around INR 3,000-3,500/t ($40-47/t) and CRCs by around INR 4,000/t ($54/t) from those for the early Dec’21 sales.
• Trade activities picked up slightly this week with some distribution network participants coming out to restock, pushing prices for hot-rolled coils (HRC) and plates (HR plate) upwards. On the other hand, demand continued to remain lacklustre for cold-rolled coils (CRC) and galvanised plain coils (GPC), pulling down prices further.
• On the overseas trade front, SteelMint’s India HRC (SAE1006) export index dropped by $3/t this week to $722/t FOB east coast. Many buyers are yet to resume their business after the New Year holidays, which kept the market largely inactive this week.