Weekly round-up: Domestic steel prices edge lower on low trade volumes amid festive holidays

The domestic steel market fell during week 34 (16 Aug- 20 Aug’22). Semi-finished steel prices decreased in the range of INR 100-1,000/tonne (t).

Domestic induction furnace finished long steel offers witnessed a downward trend, dropping by up to INR 1,200/t w-o-w. Trade reference prices for finished flats decreased in the range of INR 100-1,500/t for HRC and CRC.

Iron ore and pellets

• Odisha Mining Corporation’s (OMC) iron ore fines auction was held yesterday. Out of 1.43 mnt put on offer, only 374,000 t (26%) received bids. In the iron ore lump auction held yesterday, around 57% (542,000 t) out of the total quantity of 955,000 t received bids. The bid prices for lumps increased by up to INR 600/t and fines by INR 150/t against the last auction on 18 July.
• National Mineral Development Corporation (NMDC) scheduled an auction on 16 August for sale of 376,000 t of iron ore from its Kumaraswamy mines, Karnataka. According to sources, the entire quantity of 188,000 t of fines (Fe56.43-63.77%) and a similar quantity of lumps (Fe62.05-65.33%) was booked at INR 1,475-2,185/t and INR 2,450-2,829/t, respectively. Prices are exclusive of royalty, DMF and NMET.
• The spot price of iron ore in China fell slightly on 19 August due to low buying interest. Benchmark Fe 62% fines prices inched down by $0.9/t to $99.7/t CFR China. Enquiries in the seaborne market have decreased.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,800/tonne (t) DAP Raipur on 19 August, down around INR 400/t compared to the last assessment on 13 August.

Coal

• Australian hard coking coal prices rose by $32/t w-o-w to $271/t FOB and $291/t CNF India. Traders were heard taking positions in anticipation of a pick up in demand in the coming months. Also, steel mills in Japan and South Korea were heard making Australian coal bookings after a lull of two-three months.
• Portside RB3 (4800 NAR) thermal coal prices fell by INR 200/t w-o-w to INR 15,000/t at Vizag Port amid weak procurement demand from sponge iron manufacturers following increased usage of alternate-origin coal.
• South African RB1 (6000 NAR) coal prices rose by $20/t w-o-w to $335/t FOB as a sharp rise in global LNG prices this week lifted high-CV coal demand in Europe.

Ferrous Scrap

• The Indian market remained sluggish as buyers were less active due to the festive season and holidays during the week. Imported scrap offers came down in the absence of buyers towards the weekend. However, the market showed some recovery as a few deals were concluded.
• Buyers procured actively to shore up their inventory levels as they expect finished steel demand to recover before the onset of winter.
• SteelMint’s assessment for shredded scrap in India stands at $500/t CFR Nhava Sheva, up by over $10/t w-o-w.
• Dubai-origin HMS 1 is being offered at $500-505/t CFR levels, up by $5-10/t w-o-w.

Ferro Alloys

• As per SteelMint assessment on 19 August, Indian silico manganese prices increased by around 3% w-o-w to INR 78,700/t ex-Durgapur, INR 78,500/t ex-Vizag, and INR 79,100/t ex-Raipur. Moderate demand in the domestic market kept prices firm. 
• Domestic ferro manganese prices were rangebound with slight fluctuation of around 2% w-o-w at INR 80,100/t ex-Durgapur and INR 80,500/t ex-Raipur. Ferro manganese prices remained stable as per requirement for special steel.  
• Domestic ferro chrome (HC60%) prices were at around INR 94,500/t exw-Jajpur, rangebound this week owing to muted demand. Producers kept prices firm as they received few enquiries from the domestic market.  
• Indian ferro silicon (70%) prices rose by INR 4,350/t w-o-w owing to supply shortage. According to SteelMint’s assessment on 19 August, Guwahati-based producers were offering at around INR 148,600/t exw, while Bhutan’s offers were at around INR 150,000/t exw. 

Semi finished

Indian semi-finished steel prices decreased this week, as per SteelMint assessment. Domestic billet prices decreased by INR 400-1,000/t across regions. Similarly, sponge iron prices decreased by INR 100-700/t w-o-w.

• SAIL-BSL held two auctions for 2,000 t (one rake) and 150 t of steel grade pig iron on 17 August. In both the auctions, the entire lots were booked at an average price of INR 45,850/t and 46,450/t exw, respectively.
• About 5,000 t (two rakes) of sponge iron export deals were reported to Nepal this week. Current offers hovered around $490/t CPT Nepal for FeM 80% material (70% lump and 30% fines).
• BF-route billet export offers were stable at around $640-645/t CPT Nepal. However, no fresh deal was reported this week due to festive holidays and sufficient orders placed earlier.
• Spot prices of steel grade pig iron remained volatile this week in the range of INR 200-400/t across markets except in the north where prices surged INR 900/t.

Finished Long

India’s finished long steel manufactured via the induction furnace route observed weak buying enquiries and trades throughout the week. Festive holidays and heavy rainfall put brakes on bulk trading activity in the spot market as buyers delayed procurement owing to weak market sentiments and unclear price direction. During the festive holidays most participants avoided trading at higher prices waiting for the market to stabilise. On the other hand, manufacturers were seen reducing their offers or adjusting trade discounts as per raw material price movements.

• On a weekly basis, prices for rebar steel dropped INR 100-1,200/t w-o-w in most of the markets across regions, 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 51,500-51,900/t exw Raipur and INR 55,000-55,400/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers hovered around INR 1,200-1,500/t and the trade reference price for 200 mm angle stood at INR 57,800-58,300/t exw Raipur.
• Trade discounts offered by Raipur-based wire rod suppliers were over INR 1,000/t and the trade reference prices stood at INR 52,500-53,000/t exw Raipur and INR 52,500-52,700/t exw Durgapur for 5.5 mm size.
• This week, demand for rebar made through the blast furnace route remained dull amidst holidays during the week on the occasion of Independence Day followed by Janmashtami. Moreover, with heavy rainfall in major parts of India, construction activities slowed down resulting in increased inventory with mills as well as distributors.
• SteelMint’s weekly price assessment of rebar (12-32mm, BF-route, IS 1786, Fe500D) stands at around INR 56,500-57,000/t ($707-713/t), down marginally by INR 200/t ($3/t) w-o-w. Prices mentioned are on exy-Mumbai basis, exclusive of GST at 18%.

Finished Flat

• Prices continued to drop across markets barring Mumbai where they remained stable. The markets remained inactive in the current and preceding weeks due to festive holidays.
• Although sales have happened at current price levels, buyers are still trying to bargain. Prices are closer to the bottom but there is still scope for decline, as per distributor sources. The decline in prices won’t be steep, though, sources added.
• On the exports front, SteelMint’s India HRC export index remained firm at $583/t FOB east coast India. This was due to limited activities in the overseas markets and festive holidays in India. Market activities in Europe are anticipated to increase by this month-end, with participants returning after the holidays.