Weekly round-up: Indian semi and finished long steel prices show uptrend

The domestic steel market remained strong during week 8 (14 Feb – 19 Feb’22). Semi-finished prices increased sharply by INR 400-1,900/tonne (t).

Rebar offers also surged by INR 300-2,000/t due to active buying enquiries and trading in the spot market. Guage parity revision in a few locations was also one of the major factors behind the sharp hike in rebar prices.

Finished flat market remained stable during the week. HRC trade reference prices were range-bound across markets. However CRC prices showed an increase in few markets owing to supply constraints in few thicknesses.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 12,650/t DAP Raipur on 18 Feb’22, up INR 500/t against the last assessment on 15 Feb’22.
• Odisha Mining Corporation (OMC) had scheduled an iron ore lumps auction on 16 Feb’22. According to latest reports, the entire volume of 627,000 t was booked. The auction received bids higher by INR 450-1,550/t as against the bids in the last auction. Limited availability of high-grade material in Odisha and lower offers in the merchant market resulted in the hike in iron ore prices.
• A steep fall in spot iron ore prices in China amidst the decline in futures prices pushed down Indian pellet export prices. SteelMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) stood at $156/t.
• SteelMint’s weekly index for India’s low-grade iron ore fines (Fe 57%) exports stood at $42/t FOB east coast, lower by $18/t w-o-w. The market turned silent with no deals being heard, after futures prices in China dropped sharply.

Coal

• Australian premium low-volatile hard coking coal FOB prices remained range-bound amid buyers adopting a wait-and-watch mode.
• Latest prices for the premium HCC grade are assessed at around $440/tonne (t) FOB Australia and $461/t CNF India.
• South African RB2 (5500 NAR) portside prices remained range-bound amid limited stock at ports and vessel arrivals.
• South African RB1 prices for Feb’22 surged by $20/t w-o-w to $196/t, on FOB basis amid geopolitical tensions between Russia and Ukraine that led to a rise in gas and coal prices globally. RB2 was being sold at a premium of $5/t over the indexprice while the RB3 discount was assessed at $5/t.

Ferrous scrap

Imported scrap offers to India picked up again. However, trade activities did not see any major improvement. The imported scrap offers remained supported by the strong domestic raw material (iron ore, sponge iron), semis, and finished steel prices. Trade in imported scrap remained slow, while deals in small quantities continued to happen for HMS grade material.

Recent offers

• Shredded offers in containers were heard at around $550-555/t, CFR Nhava Sheva, unchanged w-o-w, but no confirmed deal was heard.
• Offers for Dubai-origin HMS 1 and HMS 1&2 (80:20) were being quoted at $500-505/t and $495-500/t CFR levels respectively. Buyers were not willing to pay these high price levels, and thus limited offers were heard.
• In a deal heard earlier in the week, South America-origin HMS 1&2 (80:20) were sold at $505/t CFR Chennai.
• West Africa-origin HMS offers were heard at $480-490/t CFR India.

Ferro alloys

• The overall Indian bulk ferro alloys saw a mixed trend with manganese alloys and ferro silicon prices dipping while ferro chrome prices saw an upward correction due to supply-demand mismatch.
• Indian silico manganese prices slipped due to high selling pressure mainly from the Durgapur belt. Current market prices for 60-14 grade were at INR 94,000/t exw- Durgapur while Raipur producers were offering at INR 95,500/t exw, assessed on 18 Feb’22.
• Ferro manganese (HC70%) prices dropped by around INR 3,000/t w-o-w due to low interest shown for last week’s prevailing prices. According to the assessment on 18 Feb’22, prices hovered at INR 95,000-96,000/t exw- from both Durgapur and Raipur.
• Indian ferro chrome (HC60%) prices rose this week to INR 105,100/t exw-Jajpur owing to improved demand from domestic and export markets. In addition, increasing chrome ore prices also supported ferro chrome prices. Some deals were also concluded at INR 108,500/t exw-Jajpur.
• Indian ferro silicon prices inched down this week on low trade levels and lack of buying interest. According to SteelMint’s assessment on 18 Feb’22, ferro silicon prices were at INR 141,800/t exw- Guwahati while prices from Bhutan were at around INR 143,000/t exw.

Semi-finished

Indian semi-finished steel prices increased as per SteelMint’s assessment. Domestic billet prices increased by INR 400-1,900/t across regions with a major increase of INR 1,900/t seen in Raipur and Raigarh. Similarly, sponge iron prices also increased by INR 500-1,500/t w-o-w.

• SAIL conducted an auction on 18th Feb’22 for 2,000 t of basic grade pig iron from Bhilai Steel Plant (BSP). Buyers booked the entire quantity at a weighted average price of INR 46,800/t exw.
• A state-owned steelmaker floated an export tender for spot sale of 30,000 t of steel blooms (BF-route, 150x150mm, 3SP/4SP grade) which was concluded at $647-649/t on FOB basis.
• SAIL held an auction for 4,000 t of basic grade pig iron on 17 Feb’22 from the Rourkela Steel Plant where the entire quantity got booked at a weighted average price of INR 46,100/t exw.
• SteelMint’s sponge iron (FeM 80%, lumps 100%) export price assessment to Bangladesh rose by $5/t w-o-w to $505/t CPT Benapole, equivalent to $535/t CFR Chittagong. About 7,000 t deals were reported this week.
• Deals for two rakes of sponge iron (70% lumps and 30% fines, FeM 80%) were reported recently at around $490/t (loaded on to rake), equivalent to $515/t CPT Nepal.
• IF-route billets export offer rose by $10-15/t w-o-w to $650/t exw-Durgapur, equivalent to $675/t CPT Nepal. A few lots were sold at the beginning of week at around $630/t on exw-Durgapur basis.
• Indian spot steel grade pig iron prices fluctuated by INR 200-500/t w-o-w on account of volatility in steel prices and a marginal change in coal and coke prices.

Finished longs

India’s induction-route finished long steel manufacturers saw active buying enquiries and trade in the spot market. However, from the middle of the week, new orders on higher prices were a bit slow, although these varied from region to region. Rising raw material prices and appropriate bookings supported manufacturers in increasing prices.

On a weekly basis, prices of rebar in most markets increased by INR 300-1,100/t w-o-w, while in some markets in central and southern India manufacturers increased the gauge parity by INR 500/t in order to improve the conversion spread by which rebar prices surged over INR 2,000/t as well, SteelMint’s 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 52,900-53,300/t exw Raipur, and at INR 56,100-56,500/t exw Jalna.
• Trade discounts given by Raipur- based heavy structural steel manufacturers were at INR 800-1,000/t and trade reference prices of 200 mm angles stood at INR 56,400-56,800/t exw-Raipur.
• Trade discounts given by Raipur-based wire rod suppliers hovered in the range of INR 1,500/t while trade reference prices stood at INR 51,900-52,200/t exw-Raipur, and at INR 52,300-52,500/t exw-Durgapur, for 5.5 mm.

Finished flat

• The demand scenario seemingly similar for the past few weeks has kept the domestic trade reference prices of HRC range-bound across markets. However, those of CRC showed an increase in few markets owing to supply constraints in few thicknesses.
• The prices of prepainted galvanised iron (PPGI) increased a bit in both Mumbai and Delhi as traders started offering higher after mills pushed up prices of coated flat steel products by INR 1,000/t in the second round of price adjustment in Feb’22. In the case of galvanised plain coils (GP), the market prices inched up in Mumbai while remained unchanged in Delhi.
• In the overseas trade market, SteelMint’s HRC export index remained pegged to $867/t FOB. A few HRC export deals were reported this week for April shipments as mentioned below:

Nepal: 7 rakes booked at $855/t CFR Raxaul Border at the beginning of the week. Fresh offers being relayed at $870-875/t CFR (equivalent to $850-855/t ex-plant)

Turkey: 20,000 t booked at $910/t CFR.