Weekly round-up: Domestic steel market sees positive trends

The domestic steel market witnessed positive trends during week 40 ( 26 September- 1 October 2022). Semi-finished steel prices increased in the range of INR 50-1,500/tonne (t). Moreover, domestic induction furnace (IF) finished long steel offers saw a positive price trend, surging by INR 1,500/t w-o-w. The trade reference prices for finished flat increased in the range of INR 100-1,700/t for HRCs and CRCs.

Iron ore and pellet

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,400/t, up by another INR 300/t compared to the last assessment on 27 September, 2022. Decent deals were concluded at around 64,000 t in this publishing window and all were taken into consideration.
  
• The Goa government has put up for auction four iron ore blocks, hopefully ending a decade-long innings of uncertainty. These blocks, three in the north — a block in Bicholim, one in Sirigao-Mayem and one in Monte de Sirigao — and one at Kalay in South Goa are the first set of mines and will be followed by auctions at regular intervals according to senior officials in the state. The tender document of INR 5 lakh each can be bought by November 15 and technical bids are to be submitted by November 21.
• National Mineral Development Corporation (NMDC) conducted an auction on 28 September, 2022 for sale of 600,000 t of iron ore from its Donimalai mines in Karnataka. According to sources, the entire quantity of 400,000 t of fines (Fe 59%) and 200,000 t of lumps (Fe 61%) was booked at the base price of INR 1,925/t and INR 2,497/t, respectively. Prices exclude royalty, DMF and NMET.

Coal

• Australian hard coking coal prices rose by $12/t w-o-w to $271/t FOB and $290/t CNF India. The rise in prices came on the expectations of pick-up in Indian steel demand with monsoon nearing its end and the restocking of raw material gaining steam for the upcoming months.
• Portside RB3 (4800 NAR) prices remained firm at INR 13,700/t at Vizag Port amid small parcel trades by sponge iron manufacturers.
• South African RB1 (6000 NAR) prices rose by $18/t w-o-w to $312/t FOB amid severe power outage in the country and elevated LNG prices in Europe.

Ferrous scrap

• India’s imported scrap buyers actively procured bulk scrap over containers due to cost-competitiveness. Market participants have informed that around four bulk vessels have arrived at Kandla and Chennai ports. Indian mills are booking bulk scrap vessels due to which Turkish buyers have turned cautious and are buying at higher rates to restock the material before winter. Meanwhile, there is a buzz in the market that one bulk cargo is estimated to arrive in India’s Kandla Port next week.
• On the other hand, container prices largely remained firm. However, buyers showed less interest in the containerised material. Additionally, the nearest and most favourable scrap origin, Dubai, is mostly quiet on government export restrictions.
• Shredded offers for UK-origin are now at $450-455/t CFR levels, unchanged w-o-w.

Ferro alloys

• In SteelMint’s assessment on 30 September, Indian silico manganese (60-14) prices were down by 2% w-o-w to INR 71,400/t ex-Durgapur, by 1% to INR 72,000/t ex-Vizag 1%, and by 2% to INR 72,000/t ex-Raipur. Silico manganese prices fell further due to low demand from domestic mills, while many mills have cut production.
• As on 30 September, Indian ferro manganese (HC70%) prices dropped by 2% w-o-w to INR 74,300/t ex-Durgapur and to INR 74,400/t ex-Raipur. There was still limited demand for special steels and stainless steels, which caused ferro manganese prices to fall.
• According to SteelMint’s assessment on 29 September, ferro chrome (HC 60%) prices were at around INR 95,800/t exw-Jaipur, up by INR 1,300/t owing to good buying amid the festive season.
• Indian ferro silicon (70%) prices fell by INR 1,600/t w-o-w to around INR 140,000/t exw-Guwahati due to moderate demand, as per SteelMint’s assessment on 30 September 2022. Meanwhile, Bhutan’s offers were at around INR 140,000/t exw.

Semi-finished

Indian semi-finished steel prices have increased as per SteelMint assessment. Domestic billets prices have increased by INR 400-1,500/t across regions with a major increase of INR 1,500/t seen in Goa. Similarly, sponge iron prices also increased by INR 50-500/t w-o-w.

• Durgapur Steel Plant (DSP) held an auction for 1,500 t of steel grade pig iron on 29 September 2022, and the total quantity was booked at an average price of INR 44,000/t exw.
• Rourkela Steel Plant (RSP) held an auction for 1,000 t of steel grade pig iron on 30 September 2022. The entire quantity was booked at an average price of INR 43,695/t exw.
• Bhilai Steel Plant also conducted an auction for 3,000 t of steel grade pig iron on 26 September, 2022 and all material was booked at an average price of INR 43,560/t.
• SteelMint’s weekly price assessment of sponge iron exports to Nepal fell by $5/t to $450/t CPT for FeM 80% material (70% lump and 30% fines). No major fresh deals were reported this week.
• Indian BF-route billets export offers stood at around $625-630/t CPT Nepal. However, no fresh deals were reported as Nepal mills booked sufficient volumes from Indonesia amid approaching festive holidays.
• Spot steel grade pig iron prices fell slightly by INR 200-300/t on better supply and measured production along with improved availability of scrap with continuing import shipments.

Finished longs

India’s finished long steel market from the induction furnace route observed a moderate trend in terms of transactions throughout the week. Active buying enquiries were noticed in this week and instead of bulk procurement buyers preferred limited quantity as per requirement.

On the other side, manufacturers after selling appropriate quantities, tried to quote prices on the higher side and adjusted tradable discounts as per the movement of steel billet and raw material (melting scrap and sponge iron) prices in the key markets. In this week, some BF mills raised their list prices for October deliveries. Hence, this also supported the IF-route mills in strengthening their prices, SteelMint learned.

• Prices of rebar steel surged by up to INR 1,500/t w-o-w in most of the markets, except in Chennai, where prices were down by INR 500/t, SteelMint assessment shows.
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 51,900-52,300/t exw Raipur, and at INR 55,300-55,700/t exw Jalna.
• Trade discount given by Raipur- based steel wire rod suppliers is stood at around INR 700/t and trade reference price at INR 52,300-52,700/t exw Raipur and INR 51,800-52,000/t exw Durgapur, size 5.5 mm.
• Trade reference prices stood at INR 51,800-52,000/t exw Durgapur, for 5.5 mm.
• A couple of private primary mills  increased their list prices for blast furnace route rebar by INR 1,000/t for early-October dispatches earlier this week. Others are likely to come up with their price increases in the next few days. Meanwhile, a major mill was not accepting new orders because of a scheduled maintenance shutdown and will resume its operations after the list price announcement for early-October sales.
• Distributor network participants are restocking with a cautious approach and maintaining moderate inventory because of the increased number of holidays in October amid Dussehra and Diwali festivals. However, end-consumers continued to procure at a sustained pace, SteelMint learned from reliable sources.
• SteelMint’s weekly price of rebar (12-32mm, BF-route, IS 1786, Fe500D) increased by INR 600/t to around INR 55,000-56,500/t, exw-Mumbai, exclusive of GST at 18%.

Finished flats

• Trade level prices of finished flat steel products continued moving upward this week making it the third consecutive week of increase.
• Moreover, a couple of private mills announced an increase of INR 1,000/t in their HRC and CRC list prices yesterday. Subsequent to the announcement, list prices of HRCs now stand at INR 57,750-58,000/t and CRCs at INR 65,000-66,000/t, effective from 1 October, 2022. Meanwhile, a mill also raised its coated steel prices by INR 750/t yesterday. Early-October sales list price for GP (0.8mm, 80gsm) were revised to INR 68,800/t and those of PPGI (0.5, 90gsm) to INR 80,000/t. Prices mentioned are exy-Mumbai, excluding GST @ 18%. Others are likely to follow suit.
• A pick-up in restocking requirements and sustained pace of buying by end-industrial buyers have pushed mills to raise their list prices, and lent support to those at the trade level. Also, mills have shifted the focus back to the domestic market amid low buying interest in overseas markets for alloyed HRCs and better domestic market realisation. SteelMint’s India HRC (SAE1006) export index stands at around $583/t FOB east coast, unchanged over the week. Export price indications were heard around at $620-630/t CFR Vietnam, and $630-640/t CFR UAE.