Weekly round-up: Domestic steel prices lack support despite partial recovery in trade volumes

Domestic semi-finished steel prices increased this week as strong demand was witnessed in the beginning of the week. However, prices fell later on due to limited buyer enquiries amidst low expectations of further price support.

Even as long steel prices rose marginally on slight recovery in trade volumes, finished flat steel prices declined for the sixth consecutive week.

Iron ore and pellet

• State-owned miner Odisha Mining Corporation (OMC) had scheduled an e-auction on 17 Dec’21 for around 340,000 t of iron ore lumps and 687,000 mn t of fines. Out of the total 687,000 mn t fines, 98% (676,000 t) received bids. Out of the total 340,000 t of lumps put to auction, only 48% (164,000 t) received bids.
• NMDC conducted an auction on 16 Dec’21 for 298,200 t of iron ore from the Kirandul and Bacheli mines in Chhattisgarh. The entire quantity of DR-CLO and Baila lumps was sold, sources told SteelMint. Bids for DR-CLO increased by around INR 520/t, while those for Baila lumps remained at the base price. The balance lots of fines and ROM remained unsold.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 10,200/tonne (t) DAP Raipur on 17 Dec’21, down INR 250/t against the last assessment on 14 Dec’21.
• SteelMint’s India pellet export index (Fe 64%, 3% Al, FOB east coast) has remained range-bound on a w-o-w basis at $126/tonne (t).
  -SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) dropped $2/t to $28/t FOB east coast India.

Coal

• Australian premium low-volatile hard coking coal prices remained mostly unchanged on FOB basis this week amid tight supply.
• Weather-related concerns in Australia continue to weigh on market sentiments and offers in the spot market are 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 $341.50/t FOB Australia, $344.50/t CNF China and $359.85/t CNF India.
• South African RB2 portside prices rose by INR 600/t to INR 11,000/t amid rising imported coal prices.
• South African RB1 prices rose by $8/t to $143/t due to limited stocks at RBCT port. Discounts for RB2 and RB3 coals were assessed at $12/t and $24/t, respectively.

Ferrous scrap

Following global trends, imported scrap prices into India continued to decline since the last couple of months, falling to a two-month low. However, trading picked up slightly since last week after offers declined further.

Recent offers

• Price indications for UK/EU-origin shredded in containers fell to $540/t CFR Nhava Sheva, down further by $5-10/t w-o-w.
• UAE-origin HMS 1 is being offered at $470/t CFR.
• A western India-based steel mill booked around 1,000 t of UAE-origin HMS 1&2 (80:20) in containers at $460/t CFR Kandla basis.
• Another western India-based steel mill booked around 3,000 t of UAE-origin HMS 1&2 (80:20) at $460/t CFR.

Ferro alloys

The ferro alloys market witnessed mixed sentiments this week as manganese alloys prices remained stable while ferro silicon prices dropped and ferro chrome prices rose w-o-w.

• Silico manganese prices remained range-bound owing to dull demand in both the domestic and export markets. Currently, prices of silico manganese (60-14) are hovering at INR 91,500- 91,800/t exw in Durgapur and Raipur.
• Ferro manganese (HC 70%) prices are trading in the range of INR 100,000-100,800/t exw Durgapur and Raipur. Limited demand has kept prices unchanged for ferro manganese HC 70% on a weekly basis.
• Domestic ferro chrome (HC 60%) prices increased this week owing to improved buying. The current price of ferro chrome is INR 112,265/t exw-Jajpur, Odisha.
• Domestic ferro silicon prices moved lower owing to limited demand. Buyers were reluctant to book material at higher rates. Ferro silicon (70%) is assessed at INR 171,000/t exw-Guwahati and INR 177,500/t exw-Bhutan.

Semi-finished

Semi-finished steel prices rose further this week as demand was strong in the beginning of the week, while prices fell later due to limited enquiries amidst low expectations of further price support.

As per SteelMint assessment, billet offers rose in the range of INR 200-1,500/t across regions, with a marked increase of of INR 1,500/t reported from Hyderabad, south India and by INR 500-1,000/t in the central and eastern regions. Similarly, sponge iron prices rose by INR 500-1,100/t on a weekly basis in the major markets.

• A steel mill booked around 7,500 t of BF billets for exports to Nepal at around $595-600/t CPT Raxaul border, sources informed SteelMint.
• Induction furnace grade billet export offers were reported at around $550-555/t exw-Durgapur, equivalent to $575-580/t CPT Nepal. Offers rose by $10/t w-o-w.
• Around 3,000 t of sponge iron (lumps 100%, FeM 80%) export deals were reported to Bangladesh at around $435/t CPT Benapole, equivalent to $465/t CFR Chittagong. Export prices increased by $10/t, w-o-w, due to rise in domestic offers.
• SAIL held an auction for 4,800 t of basic grade pig iron (in 48 units) on 16 Dec’21 from Rourkela Steel Plant (RSP) in Odisha. The entire quantity booked at a weighted average price of INR 38,470/t exw.
• Vizag Steel, has scheduled an e-auction for around 1,000 t of pooled iron on 20 Dec’21.
• SAIL has scheduled an auction for 10,000 t of steel grade pig iron from Bhilai Steel Plant (BSP) in Chhattisgarh for 20 Dec’21.
• Tata Metaliks has increased basic grade pig iron prices by INR 1,200/t ($16/t) to INR 40,900/t. Prices are exw-Kharagpur and applicable for the Kolkata and Howrah markets.
• Vedanta Resources concluded a tender for one rake of foundry grade pig iron for the northern region on 11 Dec’21 at around INR 40,200-40,500/t exw and the transportation cost via rake to Punjab was reported at around INR 3,500/t.
• An Indian mill has concluded an export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP grade) at around $590/t FOB.

Finished longs

Finished long steel, especially rebar, prices improved by around INR 200-1,500/t in most regions except markets in northern and central India where prices remained range-bound. Trade volumes improved slightly.

Furthermore, trade discounts in the central region went up to INR 1,000/t and INR 2,200/t in rebar and wire rod, respectively.

• The trade reference price of Fe 500 grade rebar (10-25mm) manufactured via IF is assessed at INR 44,900-45,200/t exw-Raipur and INR 48,800-49,200/t exw-Jalna.
• Trade discounts offered by Raipur-based heavy structural steel manufacturers moved in the range of INR 1,700-2,000/t and the trade reference price of 200mm angle stood at INR 51,600-52,000/t exw-Raipur.

Finished flats

• Prices continued to fall across the flat steel product category for the sixth week in a row. Buyers continued to stick to need-based procurement, disrupting the flow of material in and out of trade channels. There are increasing concerns over further decline in prices in the near term over a gradual build-up in inventory at mills, which is weiging on both domestic trade-level prices as well as export offers floated by major producers.
• SteelMint’s India HRC (SAE 1006) export index has fallen further by $17/t, w-o-w, to $773/t FOB east coast. Around 20,000-30,000 t of HRC was booked in the previous week at $790/t CFR Vietnam and $820-825/t CFR UAE for Feb’22 despatches.
• This week, Vietnam’s Hoa Phat cut prices of HRC (skin-pass) by $35-40/t to $795-800/t CIF for Feb’22 deliveries. Buying preference is likely to remain high for domestic products. Meanwhile, demand from other overseas markets also remain limited adding to the woes of Indian manufacturers.