Weekly round-up: Indian steel prices drop amid sluggish demand

Indian semi-finished steel prices decreased sharply as per SteelMint’s assessment. Domestic billet prices fell by INR 300-2,000/t.

The finished long steel market saw limited demand during the week although prices declined by INR 500-2,500/t w-o-w.

Amid sluggish demand, flat steel prices fell across India. Meanwhile, consecutive declines in global HRC export offers also weighed on buyers’ sentiments in the domestic market.

Iron ore and pellets

• Steel major JSW Steel had scheduled an auction for 1.18 million tonnes (mn t) of iron ore fines (Fe 57%) on 18 Nov’21. The entire quantity was booked at INR 710/t (ex-mines). The base price had been set at INR 700/t (ex-mines), as per reports.
• SteelMint’s India pellet export index (Fe 64%, 3% Al, FOB east coast) remained range-bound at $126/t. Weakening steel margins have forced a few northern China-based mills to announce maintenance shutdowns, voluntarily curbing output.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index fell INR 10,950/t DAP Raipur on 19 Nov’21 following a decline in offers and lower bids. After the fall, the index has moved down to the lowest level in nearly one-and-a-half months as similar price levels were last seen in end-Sept’21.
• SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) is assessed at $26/t FOB east coast India. Prices remained range-bound for the week.

Coal

• Australian premium low-volatile (PLV) hard coking coal (HCC) prices underwent a downward correction of almost 9% this week.
• Trading activities in Asian markets, excluding China, remained muted in the absence of firm buying interest.
• The sharp fall in seaborne coking coal demand ensued from increased coal production as well as the softening of steel and coke demand in China, the world’s top coal consumer.
• Indian buyers are reportedly hesitant about booking deals. Bids for Goonyella branded Australian premium mid-volatile coking coal were assessed at $360/t FOB.
• Latest prices for the premium HCC grade are assessed at around $364/tonne (t) FOB Australia, $440/t CNF China and $383/t CNF India.
• South African RB2 portside prices fell further by INR 600/t to INR 10,400/t amid lower demand from sponge iron sector.
• South African RB1 prices also remained at low levels and traded at $136/t in tandem with the decline in global coal prices. Discounts for RB2 and RB3 were assessed at $15/t and $25/t respectively.

Ferrous scrap

India’s imported scrap market observed limited trade this week. Indian buyers opted to wait and watch market behaviours. The global price downtrend slowed down market activities, making market participants hope for a further price correction. However, a few deals were heard to have been concluded.

• Around 1,000 t of US-origin shredded scrap in containers have been booked at $545/t CFR NHSV basis.
• Few deals for West Africa HMS (80:20) were heard at $460/t CFR NHSV.
• UK-origin shredded offers are being quoted at around $555-560/t CFR levels, down by $5-10/t levels w-o-w.

Ferro alloys

• Indian silico manganese prices reduced by INR 6,250-9,750/t exw W-oW in both Durgapur and Raipur. Muted demand from the market was the main reason behind the decrease in prices. Current prices of the 60-14 grade are hovering at around INR 94,150-94,500/t exw, as assessed by SteelMint.
• According to SteelMint’s assessment, Indian ferro manganese prices are at INR 106,500/t exw-Raipur, while from Durgapur, prices for HC70% grade are at INR 107,250/t exw — down by INR 12,750/t w-o-w. Lesser interest in bookings has caused the fall in ferro manganese prices.
• Indian ferro chrome prices fell by INR 3,750/t w-o-w to INR 117,950/t exw Jajpur. Factors like limited demand from domestic and global markets in line with an improvement in Chinese production have decreased the prices of Indian ferro chrome (HC60%).
• Indian ferro silicon prices have significantly decreased this week owing to lesser buying and oversupply. Current market prices for HC70% grades are at INR 177,500/t exw-Guwahati and at around INR 195,000/t exw-Bhutan.

Semi-finished

Indian semi-finished steel prices decreased sharply as per SteelMint assessment. Domestic billet prices fell by INR 300-2,000/t across regions with a major fall seen in Chennai. Similarly, low demand and falling billet prices weighed on sponge iron offers, as prices declined by INR 300-1,000/t.

• IF-route billet export offers fell by $15-20/t, w-o-w, to $565-570/t exw-Durgapur, equivalent to $590-595/t, CPT Nepal, via road delivery. A few small parcels were sold this week.
• Export prices of sponge iron (FeM 80%, lumps 100%) fell by $10/t to $450/t CPT Benapole, equivalent to $480/t CFR Chittagong.
• Tata Metaliks has reduced foundry grade pig iron prices by INR 1,200/t ($16/t), or 3%, and fresh offers stand at INR 46,000/t. Prices are exw-Kharagpur and applicable to the Kolkata and Howrah markets.
• Western India-based Vedanta Resources had floated a tender for one rake of foundry grade pig iron for the northern region, on 16 Nov’21. The tender received no bids despite reduction in the reserve price by INR 500/t to INR 41,800/t ex-plant.
• SAIL held an auction for 4,000 t (two rakes) of steel grade pig iron on 17 Nov’21 from the Bokaro Steel Plant (BSL) in Jharkhand and the entire quantity was booked at a weighted average price of INR 39,600/t exw.
• At Vizag Steel’s pooled iron auction on 18 Nov’21, the entire quantity of 3,850 t on offer got booked at INR 35,550/t exw.
• Vizag Steel floated two ocean sale export tenders on 23 Nov’21. The first is for 20,000 t of steel blooms (200x200mm, 3SP/4SP grade), while the other is for 10,000 of steel blooms (150x150mm, SAE 1008 grade) on FOB ST. delivery basis.

Finished longs

India’s finished long steel manufactured via the induction furnace route, this week, saw limited demand and transactions in the spot market across the major supplying regions in the country. Prices declined by INR 500-2,500/t w-o-w, SteelMint’s assessment shows. Due to limited buying enquiries and future bookings, finished steel inventories are rising at mills which pressured manufacturers to reduce prices as per market requirements and raw material price movements.

• The trade reference price of Fe 500 grade rebar steel manufactured via the IF route for 10-25 mm size is assessed at INR 45,900-46,200/t exw Raipur, INR 50,400-50,800/t exw-Jalna.
• Trade discounts given by Raipur based heavy structural steel manufacturers were in the range of INR 1,200-1,500/t and trade reference prices of 200 mm angles stood at INR 52,000-52,400/t exw-Raipur.
• Trade discounts given by Raipur-based wire rod suppliers were at INR 1,500-1,700/t and trade reference prices stood at INR 45,900-46,200/t exw-Raipur, INR 45,800-46,000/t exw-Durgapur, for size 5.5 mm.

Finished flats

• Trade reference prices fell across flat steel products this week amid sluggish demand. Meanwhile, consecutive declines in global HRC export offers also weighed on buyers’ sentiments in the domestic market.
• Participants in the distribution channel are looking forward to price support announcements from mills to boost trade activities as inquiries received are only on an urgent need basis at prevailing prices.
• Furthermore, the Chinese HRC (SS400) export offers at $815/t CIF India stand competitive against the domestic HRC trade market prices. However, it is still unlikely that imports would increase because expected further decline in domestic prices is nullifying this option.
• The export trade from India continues to remain low, weighing on SteelMint’s India HRC export index. An export booking for a small parcel of 20,000 t of HRCs (SAE1006) at $890/t CFR UAE was heard to have closed towards the previous weekend. The delivery pertains to Dec’21.
• However, buyers in Vietnam were heard bidding around $840-850/t CFR basis, while indicative offers from India stood around $855/t CFR. Previous offers were at around $910-920/t CFR.