As per SteelMint’s assessment for week 22, domestic billet offers fell sharply by INR 500-2,100/tonne week-on-week (w-o-w) in major locations. Also, sponge iron prices declined by up to INR 2,200/t across India.
Meanwhile, induction furnace-route rebar offers dropped by INR 800-2,200/t w-o-w, across major Indian markets.
Domestic HRC and CRC prices were discounted by around 15-20% as compared to international rates despite a sharp drop in Chinese export offers.
Iron ore and pellets
- Steel Authority of India (SAIL) conducted an auction from its Barsua iron ore mine in Odisha on 27 May’21. At the auction for 1,04,000 t of iron ore fines (Fe 60.5%), bids were received for 72,000 t at INR 7,200-7,210/t (loaded, including royalty, DMF, NMET and the additional amount under the MMDR Amendment Act).
- SAIL conducted another auction on 28 May for 100,000 t of iron ore tailings (Fe 59.8%) from its Barsua iron ore mine in Odisha. Out of the total quantity on offer, about 60% of the material, or 60,000 t, received bids at INR 6,400/t (ex-mines, including royalty, DMF, NMET and the additional amount mentioned in the MMDR Amendment Act).
- Jindal Steel and Power Limited (JSPL) is likely to emerge as a major buyer in the merchant iron ore space, with the Odisha government recently intimating Sarda Mines of the impending expiry of the Thakurani Block-B iron mines in Keonjhar district on 13 Aug’21, as per latest SteelMint reports.
- Karnataka will seek permission from the Supreme Court to reallow the export of iron ore and raise the annual cap imposed on the state from 30 mntpa to 70 mntpa. The state’s minister for mines and geology, Murugesh Nirani, said this to the media after a meeting with Union Minister Pralhad Joshi.
- SteelMint’s bi-weekly domestic pellet index “PELLEX” decreased further by INR 600/t to INR 15,400/t DAP Raipur.
- India’s iron ore export market remained silent this week witnessing limited trade amid price volatility. SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index fell marginally by $1/t to $87/t FoB east coast India.
- SteelMint’s Indian pellet export index (Fe 64% 3% Al, FoB east coast) recorded a drop of around $3/t w-o-w to $213/t.
Coal
- Australian premium hard coking coal prices significantly increased since last week, on the back of higher priced bids and fresh bookings concluded at elevated levels in the Asian markets, excluding China.
- The ex-Chinese Asian spot markets continued witnessing firm buying interest with indicative tradable bids placed between $139/t and 143/t for Jul’21 laycan cargoes.
- Latest offers for the Premium HCC grade were assessed at around $153.00.00/t FOB Australia, $280.00/t CNF China and $178.85/t CNF India.
- South African RB2 portside prices this week recorded an average increase of INR 100/t w-o-w and have been assessed at INR 7,500/t ex-Gangavaram.
- The South African API4 index surged further by $3/t w-o-w to $106/t this week. Discounts for RB2 and RB3 were assessed at $16-17/t and $27/t respectively.
Ferrous scrap
Indian imported scrap offers fellsignificantly this week. Traders werelooking to sell distressed cargo at lower levels. Most of the industry participants have adopted a wait-and-watch policy and are waiting for prices to stabilise. SteelMint’s bi-weekly assessment for UK/Europe-origin containerised shredded scrap stands at $505/tonne (t) CFR Nhava Sheva, decreasing significantly by over $30/t week-on-week (w-o-w).
- High seas offers for UAE-origin HMS 1 are now at $465/t levels and HMS 1&2 (80:20) at $455-460/t CFR levels.
- Few unconfirmed small deals for Middle-East-origin HMS 1&2 (80:20) were heard at $450-455/t levels recently, sources confirmed.
Ferro alloys
- Indian silico manganese prices were at around INR 90,000/t both in Raipur and Durgapur for HC 60-14 grade. Producers reported that there was good demand in the exports market which drove up prices, while, major exporters offered Aug-Sept’21 shipments.
- Indian ferro manganese prices increased in line with better demand from exports and higher silico manganese prices further boostedsentiments of the smelters. Currently, prices are at around INR 90,000/t ex-Raipur and Durgapur for HC 70% grade. Meanwhile, MOIL prices settled at INR 86,400/t for HC 70-72% grade.
- Indian ferro chrome prices increased this week after the Vedanta ferro chrome auctions amidst supply shortage in the domestic market. Demand for ferro chrome was high, as buyers worried about the availability of ferro chrome in the market.
- Indian ferro silicon prices increased further to INR 132,000/t ex-Guwahati. Bhutanplants were stable at INR 118,500-119,000/t exw. The supply and dispatch situation remained affected from both destinations due to lockdowns and truck unavailability.
Semi-finished
On a weekly basis, domestic billet offers fell sharply by INR 500-2,100/t in major locations. Sponge iron prices also declined by up to INR 2,200/t across India with a major decrease of INR 2,000-2,200/t seen in Hyderabad and Bellary in southern India.
- RINL (Vizag Steel) floated two export tenders, of 15,000 t each, for a total of 30,000 t of steel blooms (150x150mm, 3SP/4SP grade) with the due date being 4 June’21. The shipment is scheduled in end-July’21.
- Steel Authority of India Ltd (SAIL) rescheduled its auction for 8,550 t (three rakes) of steel grade pig iron from the Bokaro Steel Plant in Jharkhand to 31 May’21.
- SAIL scheduled an auction on 31 May’21 for 10,650 t of steel grade pig iron from its Bhilai Steel Plant (BSP) in Chhattisgarh.
- A state-owned Indian steel mill floated an export tender for 18,000 t of slabs for end-June ’21 shipment from Paradip Port, whose due date for bid submission was 18 May’21, concluded at around $800/t FoB.
- Indian sponge iron export offers dropped this week by $5/t to around $440-445/t CPT Benapole, equivalent to $460-465/t CFR Chittagong, Bangladesh. The prices corrected on drop in domestic offers due to limited demand.
- Steel grade pig iron prices plunged by INR 400-1,500/t with a major fall seen in the eastern region by INR 1,000-1,500/t followed by INR 400-700/t in the remaining locations on account of slump in billet prices as well falling export realisations.
- Induction grade (IF) billet export offers stood at around $570/t exw-Durgapur (equivalent to $595-600/t CPT Nepal). Meanwhile, two rakes (5,500 t) of blast furnace (BF) grade billet export deals were reported this week at around $665/t CPT Nepal, through an eastern India-based primary mill.
Finished longs
Finish long steel via the induction furnace (IF) route witnessed a downtrend in terms of prices this week, while rebar steel prices declined by INR 800-2,200/t w-o-w, across major Indian markets, SteelMint’s assessment shows. Volatile semi-finished steel prices and uncertain market trends made traders cautious about booking hefty volumes of long steel on the back of limited demand and trade in the spot market following rising inventories at mills. This pushed long steel manufacturers to reduce their offers.
- Trade reference induction grade rebar steel prices of 10-25 mm were assessed at INR 44,700-45,000/t exw Raipur, INR 48,400-48,800/t exw-Jalna.
- Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 200-400/t and trade reference prices of 200 mm angles were at INR 47,600-48,000/t exw-Raipur.
- Trade discounts for wire rods in Raipur were at INR 500-700/t and trade reference prices stood at INR 44,700-44,900/t exw-Raipur, INR 44,500-44,800/t exw-Durgapur, size 5.5 mm.
Finished flats
- Domestic HRC and CRC prices continued to remain discounted by around 15-20% as compared to international rates despite a sharp drop in Chinese export offers. Thus, to reduce this gap, Indian mills are planning to further lift local HRC and CRC prices by around INR 2,000-3,000/t ($27-41). However, an official announcement is still awaited. In May’21 alone, a few major steel mills lifted prices twice .
- Mills plan to increase prices since steelmakers are anticipating an improvement in demand in the traders’ market as well as in end-user industries as the lockdown starts easing in various states. However, since the last few months, domestic demand has remained subdued and the volumes allocated for domestic sales shifted to exports. This resulted in limited allocations in the traders’ market.
- On other hand, the domestic trade market is dull and inactive since buyers are reluctant to purchase the material at higher prices. Also, it does not seem the market will be able to absorb a further hike in prices due to the following reasons.
- SteelMint’s benchmark prices for 2.5 mm hot-rolled coils (HRCs) stand at INR 65,000-66,000/t (exy-Mumbai), moderate against last week. The prices mentioned do not include GST @18%.
Outlook
Major mills may further increase HRC and CRC prices to maintain the momentum in the market. However, traders are reluctant to purchase material at higher prices. Once trade activities gradually pick up in states where the restrictions are being eased, we will have a better understanding of whether the market can absorb the price hike or not.
Reference prices as on 29th May’21 (Week 22)
Prices are exw & exclusive of GST
Indian export reference prices as on 29th May’21
Prices in $/t
Source: SteelMint Research
Leave a Reply