Weekly round up: Indian steel market remains upbeat as prices edge higher

The domestic steel market continued to remained upbeat during week 9 (21 Feb – 26 Feb’22). Semi-finished steel prices increased in the range of INR 200-3,000/tonne (t).

India’s induction furnace route finished long steel remained supported and prices increased by INR 1,300-3,000/t w-o-w.

Demand for finished flat steel was slow during the week. However, CRC and coated flat steel product prices increased on supply constraints and rising raw material costs.

Iron ore and pellet

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, at INR 12,650/tonne (t) DAP Raipur on 25 Feb, stable against the last assessment on 22 Feb. Around 60,000 t pellet deals were reported. Central India-based pellet players raised offers following NMDC’s iron ore price hike; however, trades are yet to take place at increased offers.
• An Odisha-based pellet producer concluded an export deal for 55,000 t of pellets (Fe 63%, 3.5% Al). The deal was heard concluded at $174/t CFR China, sources confirmed. India’s pellet export shipments rose to a seven-month high in Jan to 1.19 mnt compared to 0.38 mnt in Dec on renewed Chinese buying.
• NMDC raised iron ore prices by INR 680/t for DR CLO and INR 300/t for fines. Hike in prices in Odisha resulted in increase in offers.
• SteelMint’s weekly index for India’s low-grade iron ore fines (Fe 57%) exports stood at $49/t FOB east coast, up by $7/t w-o-w. The market has turned silent with no deals being heard, despite a slight price recovery.

Coal

• Australian premium low-volatile hard coking coal prices surged $18/t this week with the outbreak of the Russia-Ukraine war and subsequent sanctions by western countries on Russia that led to increased demand for Australian coal.
• Latest prices for premium HCC grade are assessed at around $458/t FOB Australia and $484/t CNF India.
• South African RB2 (5500 NAR) coal portside prices surged INR 1,200/t w-o-w amid eslcated South African coal prices.
• South African RB1 coal prices for Mar surged $46/t w-o-w to $242/t on FOB basis amid the Russia and Ukraine war. RB2 is being sold at a premium of $8/t over the index, while RB3 fetched a premium of $5/t.

Ferrous scrap

India’s imported scrap market remained active this week with trade activities picking up despite a hike in offers. The price rally in sponge iron and billets lent support to imported scrap enquiries. Global ferrous scrap offers have edged up by $5/t after Turkey resumed bookings actively.

Recent deals

• In a recent deal concluded, South Africa-origin HMS 1&2 (90:10) was booked at $515/t CFR Nava Sheva.
• 1,000 t of Dubai-origin HMS 1 was sold at $510/t CFR Nava Sheva, Mundra basis. Fresh offers are being quoted at $515/t CFR.
• Meanwhile, in a deal concluded earlier this week, 2,000 t of Dubai-origin HMS 1&2 (80:20) was bought by a western India-based mill at $500/t.
• Shredded offers in containers are heard at around $550-555/t CFR Nhava Sheva, unchanged w-o-w, but no confirmed deal was heard.

Domestic scrap prices increased following the improvement in semi-finished and finished steel trades. HMS (80:20) prices moved up by INR 2,300/t to INR 40,300/t ($535/t) DAP Mumbai, as compared to the landed costs of imported Dubai-origin HMS 1&2 (80:20) which come at INR 40,000/t. Current import offers of the same stand at $505/t CFR Nhava Sheva (INR 38,000/t). Thus, the price parity between imported and domestic scrap has narrowed.

Ferro alloys

The overall ferro alloys market was optimistic this week with manganese alloys and ferro chrome prices rising due to the Russia-Ukraine war. However, ferro silicon prices slipped owing to the lack of buying.

• Indian silico manganese prices fell early in the week but started rising after the Russian-Ukrainian conflict broke out. Prices for the 60-14 grade were hovering around INR 98,000-100,000/t exw Durgapur and Raipur.
• Ferro manganese (HC70%) prices rose this week to around INR 97,000/t exw Raipur and Durgapur. The rise  in silico manganese prices encouraged producers to raise offers.
• Indian ferro chrome (HC60%) prices rose by INR 3,900/t w-o-w to around 109,000/t exw Jajpur. Improved demand in the domestic and export markets in line with the hike in UG2 chrome ore prices pushed ferro chrome prices higher this week.
• Indian ferro silicon (70%) prices dropped marginally on lack of buying interest. According to SteelMint’s assessment on 25 Feb, prices are at INR 140,000-141,000/t exw Guwahati and Bhutan.

Semi finished

Indian semi-finished steel prices increased sharply as per SteelMint assessment. Billet offers rose in the range of INR 600-3,000/tonne across regions, with a major rise of INR 3,000/t reported in Chennai, south India. Similarly, sponge iron prices also rose by INR 200-2,100/t on a weekly basis.

• Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur hit an all-time high since SteelMint started maintaining data from Jul’12.
• SAIL held an auction for 2,000 t of steel grade pig iron on 23 Feb’22 from the Bokaro Steel Plant (BSL) in Jharkhand in which the entire quantity was booked at a weighted average price of INR 46,550/t exw.
• Tata Metaliks Ltd. has concluded an export deal for a rake (2,500 t) of basic grade (Si 1.2%) pig iron to Nepal at around $620/t exw eastern India, equivalent to $639-640/t CPT Nepal.
• SAIL held an auction for 4,800 t of basic pig iron (in 48 units) on 23 Feb from the Rourkela Steel Plant (RSP). Buyers actively participated in the auction and booked the entire quantity at INR 45,100-46,350/t exw.
• An Indian steel mill concluded an export deal for 15,000 t of steel grade pig iron for early March shipment at around $640/t CFR SE Asia, equivalent to $580-585/t FOB India.
• SteelMint’s sponge iron (FeM 80%, lumps 100%) export price assessment to Bangladesh rose by $5/t w-o-w to $510/t CPT Benapole, equivalent to $540/t CFR Chittagong. About 10,000 t deals were reported this week.
• Deals for three rakes of sponge iron were recently reported to Nepal, while fresh offers stood at $495-500/t (loaded on to rake), equivalent to $520-525/t CPT Nepal, (70% lumps and 30% fines, FeM 80%).
• IF route billets export offers rose to around $660/t exw Durgapur, equivalent to $685/t CPT Nepal. Deals were reported for a couple of rakes this week at around $650-655/t on exw Durgapur basis.
• Indian spot steel grade pig iron prices increased this week with a major hike of INR 2,000/t recorded in Durgapur due to closure of a couple of plants. In some other markets prices rose by INR 200-400/t.

Finished longs

India’s induction furnace route finished long steel prices continued the uptrend this week. Manufactures of rebar in most of markets observed active buying enquiries and trades in the spot market. Adequate future booking orders, shortage of different sizes and grades and delays in despatch and deliveries kept prices supported. Along with active demand in market, higher raw material costs pushed long steel prices higher. On a weekly basis, prices for rebar steel increased by INR 1,300-3,000/t w-o-w, as per SteelMint assessment.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm was assessed at INR 54,500-54,900/t exw Raipur and INR 59,100-59,500/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers is around INR 700-900/t and trade reference price of 200 mm angles stood at INR 57,400-57,800/t exw Raipur.
• Trade discounts offered by Raipur-based wire rod suppliers are hovering around INR 1,000/t and trade reference prices stood at INR 53,200-53,500/t exw Raipur and INR 53,300-53,500/t exw Durgapur for 5.5 mm wire rods .

Finished flats

• Demand in the key markets kept slowing down since the beginning of Feb, which led to a correction in prices earlier this week. However, CRC and coated flat steel product prices increased on supply constraints and rising raw material costs.
• Further, prices are expected to increase in the near term as raw material prices remain firm due to the ongoing tussle between Russia and Ukraine.
• SteelMint’s India HRC export index was assessed at $864/t FOB East coast, down $3/t. Export deals for HRCs were reported to the UAE at $905/t CFR and to Turkey at $910/t CFR, both down from previous deal prices. However, by the middle of the week, all the major steel mills put their offers on hold and might come up with fresh offers in the coming week.