Weekly round-up: Semi-finished steel market weakens even as flats prices remain stable

The domestic steel market continued the downtrend during week 44 (24-29 October, 2022). Semi-finished steel prices fell in the range of INR 100-1,500/tonne (t).

Domestic induction furnace finished long steel offers fell by INR  200 -1,100/t w-o-w. Prices of finished flats remained stable in all markets, with the exception of Bengaluru in south India where HRC prices dropped by INR 200/t.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,000/tonne (t) DAP Raipur, stable compared to the last assessment on 26 October, 2022 amid limited deals. Around 20,000-25,000 t of deals were reported in this publishing window.
• State-owned KIOCL has floated a tender for 2,000 t of pellets (63% Fe, 8% SiO2+Al2O3) through road mode of dispatch. The due date for the tender is 29 October and has been floated only for KIOCL’s empanelled customers. The company has recently notified that pellets plant operations in Mangalore have once again been suspended temporarily from 23 August.
• State-owned Industrial Development Corporation of Odisha Ltd (IDCOL) had scheduled an auction on 27 October for sale of iron ore from its Roida ‘C’ iron and manganese mine in Keonjhar, Odisha. According to market sources, only 15,200 t of lump (5-18mm, Fe62-65%) was booked out of 21,500 t at the base price of INR 6,950/t ex-mines, while the fines lot remained unsold. Prices include royalty, DMF and NMET.
• NMDC had scheduled two iron ore auctions from Karnataka on 29 October. The first auction was for 160,000 t of lumps (Fe61%, indicative) from its Donimalai mines, while the second auction was for 445,000 t of fines and lumps (Fe57.62-64.68%, indicative) from the Kumaraswamy mines. 

Coal

• Australian hard coking coal prices rose by $13/t w-o-w to $312/t FOB and $332/t CNF India. Prices rose as buying interest from India improved marginally. This, coupled with supply tightness in Australia due to wet weather, kept coking coal prices supported.
• Portside thermal coal prices for RB3 (4800 NAR) prices rose by INR 300/t w-o-w to INR 14,600/t at Vizag Port amid tight availability at ports.
• South African RB1 (6000 NAR) prices fell by $10/t w-o-w to $238/t FOB amid limited European demand due to mild weather conditions and strong inventory buildup.

Ferrous Scrap

• The imported scrap market was mostly quiet this week due to the Diwali holidays which impacted market activities. The market turned weak on limited buying appetite. However, some containerised bookings were heard at low levels. Buyers and mills anticipate the market to pick up from next week as construction activities resume in winter.
• Around 500 t shredded scrap was booked from Europe at $443/t CFR Nhava Sheva
• SteelMint’s assessment for shredded scrap of European origin stands at $440/t CFR Nhava Sheva , down $12/t w-o-w.

Ferro Alloys

• As per SteelMint’s assessment on 28 October, Indian silico manganese prices rose by 2% w-o-w to INR 80,200/t ex-Durgapur, up 4% to INR 76,400/t ex-Vizag and an increase of 3% w-o-w to INR 80,900/t ex-Raipur. Increase in demand.
• As on 28 October, domestic ferro manganese prices rose by around 4% w-o-w to INR 80,000/t ex-Durgapur and ex-Raipur at INR 79,000/t. Last week, the demand for special steels and stainless steels improved, supported a a slight increase in the price of ferro manganese.
• Indian ferro chrome prices increased by INR 2,500/t w-o-w amid slightly better demand and high production costs. Producers were offering at around INR 105,000-106,000/t exw Jajpur, assessed on 27 October.
• According to SteelMint’s assessment on 28 October, Guwahati producers were offering around INR 131,400/t exw. Guwahati producers were not benefiting much from the expiration of the BIS certificate due to weak demand. Meanwhile, Bhutan producers with BIS certificate registration were offering at around INR 133,500/t ex-factory.

Semi-Finished

Semis trades slowed down this week as prices slumped by INR 100-1,500/t amid lower enquiries for finished products in major markets.

Domestic billet prices decreased by INR 300-1,500/t. Similarly, sponge manufacturers were under pressure to reduce offers by INR 100-1,200/t w-o-w.

• SAIL-Rourkela Steel Plant held an auction for 2,000 t of steel grade pig iron on 28 October. The entire quantity was booked at an average price of INR 42,200/t exw. 
• At Durgapur Steel Plant’s auction on 28 October, 1,100 t was sold out of 2,000 t at an average price of INR 42,400/t exw.
• Sponge iron export price assessment remains stable at around $430-435/t CPT Nepal, (FeM 80%, lumps 70%, fines 30%). However, buying interest remained weak during festive holidays and concerns around opening of LCs.
• Spot steel-grade pig iron prices dropped INR 100-700/t, with the major dip of INR 500-700/t seen in central and eastern India. Falling steel prices, improved domestic pig iron supply along with imports weighed on the pig iron market.

Finished Long

India’s induction furnace finished long steel market witnessed dull purchase enquiries and trades owing to festive holidays across regions. In most markets unavailability of labour and transporters slowed down lifting of previously-booked rebar, wire rod and structural steel, while buyers were less active in placing new orders. Manufacturers across regions tried to keep offer prices stable or reduce them slightly as per raw material price movements.

• On a weekly basis, rebar prices fell by INR 200-1,100/t, while in a few markets in the south and west proces remained stable w-o-w, SteelMint assessment shows.
• The trade reference price of Fe 500 rebar manufactured via the IF route for 10-25 mm size was assessed at INR 50,100-50,500/t exw Raipur, and INR 54,300-54,700/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were around INR 1,300-1,500/t and the trade reference price of 200 mm angles stood at INR 55,800-56,200/t exw Raipur.
• Trade reference prices of wire rods in major markets stood at INR 50,500-51,000/t exw Raipur and INR 49,500-49,800/t exw Durgapur for size 5.5 mm.
• Buying interest remained lacklustre this week with back-to-back festive holidays keeping buyers and seller out of the market. Moreover, traders are expecting primary producers to announce their November sales prices in the next few days and hence stayed on the sidelines.
• This week’s assessment for rebar (12-32mm, BF-route, IS 1786, Fe500D) stood unchanged at INR 56,000-57,000/t exy-Mumbai, excluding GST at 18%.

Finished Flat

• Trade-level prices of finished flat steel products remained largely unchanged this week. “The distribution network participants started resuming activities post festive holidays. However, there are very few active buyers in the market with Chhath Puja around the corner,” informed sources. Furthermore, both sellers and buyers are awaiting the November sales price announcement by the primary steel producers.
• On the exports front, offering alloyed HRC to overseas markets remains a major bone of contention for steel mills with 15% export duty on non-alloyed finished flat steel products. SteelMint’s India HRC (SAE1006) hovered around $573/t FOB east coast this week. Limited buying interest globally amid dollar appreciation and weakening export offers from other exporting countries also kept prices depressed. On the top of this, rising concerns regarding an impending global recession are further driving importers to the sidelines.