Weekly round-up: Semi-finished market remains volatile, flat steel prices edge down

The domestic steel market continued to fluctuate during week 18 (25 April to 30 April 2022). Semi-finished steel prices fluctuated in the range of INR 100-2,200/tonne (t).

Domestic induction furnace finished long steel market witnessed a mixed trend. Offers varied in the range of INR 800-1,200/t w-o-w. The trade reference prices for finished flat steel (HRCs and CRCs) fell by INR 500-3,400/t.

Iron ore and pellets

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,250/tonne (t) DAP Raipur on 29 April 2022, down INR 600/t w-o-w. Weak demand and decreasing sponge iron prices kept pellet offers under pressure.

• The spot price of iron ore continued to rise on improved buying interest. The benchmark Fe 62% fines prices moved up by $1.5/t to settle at $140.45/t CFR China towards the end of this week. Logistical constraints and a reduction in buying activities weighed on prices at the beginning of this week.
• India’s largest iron ore miner, NMDC, kept iron ore prices unchanged for May 2022 deliveries, sources confirmed. Earlier this week, NMDC had scheduled two iron ore auctions from Chhattisgarh on 28 April 2022. The entire lot of 16,800 t of DR-CLO (10-40mm, Fe 67%) was booked at INR 7,375/t along with the two lots of ROM at base price. Rest of the lots from Kirandul and Bacheli remained unsold.
• SteelMint’s weekly index for India’s low-grade iron ore fines (Fe 57%) exports stood at $55/t FOB east coast, down by $6/t w-o-w.

Coal

• Portside RB2 (5500 NAR) prices remained firm at INR 22,000/t at Gangavaram Port as tight supply conditions at ports offset a sharp fall in coal import prices. South African RB1 prices for April 2022 fell by $54/t w-o-w and stood at $260/t, FoB basis amid weak Chinese buying interest surrounding Covid lockdowns and falling domestic coal prices in the country.
• Australian premium low-volatile hard coking coal prices increased by $69/t w-o-w amid strong restocking demand. The latest prices for the premium HCC grade are assessed at around $518/tonne (t) FOB Australia and $543/t CNF India.

Ferrous scrap

• India’s imported scrap market remained less active with only HMS trade being seen considering the drop in offers. However, shredded scrap deals remained limited in the absence of firm bids. Meanwhile, currently, the most preferred scrap source, Dubai, is closed for one week on account of Eid holidays. Hence, people are likely to shift their preference to material from Yemen, Mauritius, and West Africa.
• UK-origin shredded is being offered at $605-610/t CFR levels, moving down significantly by around $40/t w-o-w. Negotiations for shredded were heard at $605/t levels, but the deal remained unconfirmed, informed a reliable source.
• Around 5,000 t of Dubai-origin containerised HMS (80:20) was booked at $550/t CFR Nhava Sheva.
• A northern India-based steel maker booked a small quantity of HMS 1 at $565/t CFR Mundra basis, earlier in the week. However, offers increased to $570/t towards the weekend.
  Additionally, many container deals were concluded for Yemen and Mauritius-origin material considering the short distance and cost competitiveness.

Ferro alloys

The Indian ferro alloys market saw a mixed trend this week as manganese alloys and ferro silicon witnessed a bearish sentiment, while ferro chrome prices rose amid less production.

• Indian silico manganese (60-14) prices dropped by around INR 3,000-4,000/t w-o-w, owing to sluggish domestic demand and sufficient inventories held by few producers. According to SteelMint’s assessment, the current market prices were hovering at around INR 96,000-100,000/t exw-Raipur, Durgapur and Vizag.
• Indian ferro manganese (HC70%) producers were facing selling pressure due to oversupply of material. Producers were offering at around INR 99,000–104,000/t exw from both Durgapur and Raipur, assessed on 30 April.
• Indian ferro chrome (HC60%) prices spiked by INR 4,700/t w-o-w to INR 125,900/t exw-Jajpur amid production curtailment and high chrome ore prices. Meanwhile, FACOR’s auction concluded at higher level also supported the domestic ferro chrome prices.
• Indian ferro silicon (70%) prices fell at around INR 157,250/t exw-Guwahati due to weak demand as many buyers were in wait-and-watch mode with market participants anticipating a correction in ferro silicon prices next month.

Semi-finished 

The semi finished steel market observed volatility in prices as demand was subdued during these days, which led to price fluctuations in floated offers from the mid-sized mills.

• Domestic billet prices fluctuated by INR 100-2,200/t, following the volatilty in sponge iron offers by INR 200-1,400/t w-o-w.
• NALCO has issued an open tender for supply of 800 t of pig iron for its smelter located at Angul in Odisha. The last date for bid submission is 19 May 2202.
• SAIL held an auction for 3,500 t of steel grade pig iron on 29 April 2022 from the Durgapur Steel Plant (DSP). Buyers booked the entire quantity at a weighted average price of INR 57,250/t exw.
• SteelMint’s bi-weekly price assessment for Indian billet exports (150*150mm, 3SP/4SP, BOF route) stood at around $750/t FOB on 29 April 2022, down by around $8/t w-o-w.
• Indian induction furnace (IF) route billet (produced by the mid-sized plants) offers stood at $730-735/t exw-Durgapur, equivalent to $755-760/t CPT Nepal, down $15/t, w-o-w.
• An eastern India-based primary mill concluded deals for BF-route billets and wire rods to Nepal in the beginning of this week at a price of around $760/t and $870/t, CPT Nepal, respectively.
• A Nepal-based mill booked a rake (about 2,500 t) of controlled chemistry IF-route wire rods recently from Raipur at an average price of around $810/t loaded to wagon (LTW), equivalent to $835/t CPT Nepal.
• India’s sponge iron (FeM 80%, 100% lump) export prices to Bangladesh fell by $25/t to $490/t CPT Benapole and about 20,000 t of deals were reported this week at $480-490/t CPT Benapole basis.
• Steel grade pig iron prices fell by up to INR 1,000/t, w-o-w, in which a major fall of INR 700-1,000/t was recorded in central India, followed by INR 500-700/t in the east and northern regions.The prices fell on a slight improvement in supply along with measured demand on decline in furnaces production due to power cuts in a few states.

Finished longs

India’s finished long steel market through the induction furnace route observed moderate buying enquiries and trades this week across regions. Highly volatile semi-finished steel prices on a daily basis broke the momentum of bulk trading activities in the spot market. In most of the markets, manufacturers of rebar steel noticed that traders were avoiding storing at their yards and booked quantities only as per their needs.

On the other side, as per previous booking orders and movement of steel billet prices in key markets, producers adjusted the trade prices either by reducing the trade discount or by fluctuating the offers, SteelMint learnt. On a weekly basis, as per SteelMint’s assessment, prices of rebar steel witnessed a mixed trend, being down in most of the markets by up to INR 1,200/t, while in a few markets, prices rose to INR 800/t.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 60,500-60,900/t exw-Raipur, INR 63,100-63,500/t exw-Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were over INR 1,000/t and trade reference prices of 200 mm angles stood at INR 65,500-66,000/t exw-Raipur.
• Trade reference prices for steel wire rods via resellers stood at INR 60,300-60,500/t exw-Raipur, and through mills at INR 60,800-61,200/t exw-Durgapur, for size 5.5 mm.

Finished flats

• The prices of flat steel products continued to move down this week weighed down by the weakening of sentiments in both domestic and overseas trade. Deals slowed down further as market participants awaited mills’ announcement for the May 2022 sales in the upcoming week. Moreover, participants in the  distribution network have been looking forward to some relief in the form of discounts to boost trade activities in the market.
• On the exports front, offers in the EU market for HRCs (S275) dropped to $1,130-1,140/t CFR (down $5/t w-o-w), that to UAE to $950-980/t ($25/t) for June- early July deliveries. Availability of cheaper alternatives in the UAE and issues around opening up of LCs in the EU market kept the inquiries low from these regions. Moreover, SteelMint’s HRC (SAE1006) export index stood at around $920/t FOB east coast India, down by $20/t w-o-w.