Weekly round-up: Semi-finished steel prices soften on weak trade sentiments

The domestic steel market fell during week 20 (9 May-14 May’22). Semi-finished steel prices edged down in the range of INR 500-2,800/tonne (t).

Domestic induction furnace finished long steel offers witnessed a downtrend,offers dropped in the range of INR 1,200-3,000/t w-o-w. The trade reference prices for finished flat fell in the range of INR 400-2,500/t for HRCs and CRCs.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 10,500/tonne (t) DAP Raipur on 13 May 2022, down around INR 350/t compared to the last assessment on 10 May. Buyers are eagerly waiting for the next price cut from pellet makers.
• India’s pellet export market witnessed limited trades this past week. SteelMint’s India pellet (Fe 63%, 3% Al) export index, FOB east coast, decreased by $10/t w-o-w to $134/t on 11 May, 2022 from $144/t on 4 May. The recent drop in iron ore fines CFR China has weighed on bids for Indian pellets.
• SteelMint’s weekly index for India’s low-grade iron ore fines (Fe 57%) exports stood at $51/t FOB east coast, down $10/t w-o-w. Drop in global iron ore fines prices, weaker iron and steel futures have weighed down bids for Indian ore in China.
• State PSU miner OMC has scheduled an iron ore auction for 19 May’22. Around 971,000 t of lump ore and 1.285 mnt of fines will be put up for auction.

Coal

• Portside RB2 (5500 NAR) prices remained firm at INR 22,500/t at Gangavaram Port this week amid elevated imported prices and limited vessel arrival from South Africa in the upcoming weeks.
• South African RB1 prices rose further by $18/t w-o-w to $328/t FOB amid logistic concerns at RBCT Port.
• In Australian coking coal market this week, Arcelormittal kept it’s 75000 t Australian coking coal auction unawarded but this caused price volatility in the market and ultimately Australian premium hard coking coal prices saw a net drop of $2/t. The latest prices for the premium grade are assessed at around $515/tonne (t) FOB Australia and $544/t CNF India.

Ferrous Scrap

India’s imported scrap prices fell further this week with very few bookings recorded. The steep currency depreciation and sharp volatility in global scrap prices kept trade activities limited. The Indian Rupee (INR) depreciated to 77.5 against the dollar as against 76.9 levels seen a week ago.

Participants believe that global suppliers could’t hold much now and are ready to sell their material at low prices. A few buyers were holding back in anticipation of a further price correction, SteelMint learnt.

• Price indications for UK-origin shredded in containers are assessed at around $540-545/t CFR levels, down by around $50/t w-o-w. Deals remained absent.
• UAE-origin HMS 1 is being quoted at $535-540/t CFR levels. A small quantity deal was concluded at $535/t CFR levels.
• A deal for 2,400 t of Dubai-origin HMS-1 was concluded at $555/t CFR Nhava Sheva, earlier in the week.

Ferro Alloys

Indian ferro alloys market saw a mixed trend this week as manganese alloys and ferro silicon edged down while ferro chrome prices inched up post Vedanta’s auction.

• Indian silico manganese prices fell by 5% w-o-w due to high selling pressure. Container shortage is a matter of urgent concern. According to SteelMint’s assessment on 13 May, silico manganese (60-14) prices were hovering around INR 86,700-90,500/t exw from Durgapur and Raipur.
• Indian ferro manganese producers reduced their offers for HC 70% grade owing to oversupply of material. This week ferro manganese (HC70%) were being offered at around INR 92,000-96,000/t exw- Raipur and Durgapur, assessed on 13 May.
• Indian ferro chrome producers inched up their offers by INR 1,300/t w-o-w post-active participation in Vedanta’s ferro chrome auction held on 10 May 2022. According to SteelMint’s assessment on 12 May, producers were offering at around INR 127,500/t exw- Jajpur.
• Indian ferro silicon prices fell by INR 3,400/t w-o-w to INR 141,600/t exw-Guwahati. Indian buyers were bargaining hard due to the downtrend in the stainless steel market. Meanwhile, traders were showing lack of interest in advance bookings due to the continuously falling prices which led to weak demand this week.

Semi-finished steel

Indian semi-finished steel prices decreased sharply, as per SteelMint assessment, with domestic billet prices falling by INR 1,500-2,800/t across regions, majorly in Raipur and Ahmedabad. Similarly, low demand and the decline in billet prices weighed on sponge iron offers, as prices dropped INR 500-1,950/t.

• SAIL concluded an auction for 4,000 t of steel grade pig iron from Durgapur Steel Plant (DSP) at INR 52,500/t exw on 13 May and 6,000 t of steel grade pig iron from the Bokaro Steel Plant (BSL) at INR 53,450/t exw on 11 May. Prices are on weighted average basis.
• SteelMint’s bi-weekly price assessment for Indian billet exports (150*150mm, 3SP/4SP, BOF route) stood at around $705/tonne (t) FOB on 10 April, down $30/t w-o-w.
• Tata Metaliks reduced basic grade pig iron prices by INR 3,500/t to INR 56,800/t and foundry grade by INR 2,800/t to INR 60,000/t. Prices are exw Kharagpur, applicable for the Kolkata and Howrah markets.
• SAIL floated an ocean sale export tender for 18,900 t of prime mild steel non-alloy concast billet as against irrevocable L/C without recourse to drawer L/C payable at sight terms. The due date for the tender is 12 May
• Vizag Steel, conducted an auction for 1,250 t of basic grade pig iron on 9 May. Buyers booked the entire quantity at a weighted average price of INR 56,000/t exw.
• About 15,000 t of induction furnace-route billets export deals were reported to Nepal at a price range of $670-680/t exw, eastern India basis, equivalent to $700-705/t CPT Nepal. These offers fell by $35/t, w-o-w.
• Export offers of blast furnace (BF)-route billets fell to around $740/t CPT Nepal. However, no fresh deals were reported amidst sharp price correction by the mid-sized plants.
• Indian spot steel grade pig iron prices fell by INR 2,200-2,500/t, w-o-w. Prices trended down due to improved domestic supply amidst slow demand. In addition, the fall in export realizations was one of the major factors behind softening domestic pig iron prices.

Finished Long

India’s finished long steel market (induction furnace route) witnessed weak buying enquiries and trades this week across regions. Volatile semi-finished steel prices forced buyers to adopt a wait-and-watch stance, which led to the delay in bulk procurement as only needs-based bookings were heard concluded.

Manufacturers are facing the problem of rising inventories, although they vary from region to region and, as per the movement of steel billet prices in key markets, producers adjusted the trade prices either by offering trade discounts or fluctuating offers.

On a weekly basis, rebar prices fell across regions in the range of INR 1,200-3,000/t, SteelMint assessment shows.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 57,500-57,900/t exw Raipur and INR 59,100-59,500/t exw Jalna.
•  Trade discounts given by Raipur-based heavy structural steel manufacturers were over INR 1,000/t and the trade reference price for 200mm angle stood at INR 62,800-63,200/t exw Raipur.
•  Trade discounts given by Raipur-based wire rod suppliers were over INR 1,000/t and trade reference prices stood at INR 57,000-57,500/t exw Raipur and INR 57,300-57,500/t exw Durgapur for size 5.5mm wire rod.

Finished Flat

• The prices of flat steel products have been under pressure and falling since mid-April. This week the prices softened further across flat steel product categories. Lacklustre trade market activity in both the overseas and domestic markets weighed on prices.
• “Buyers are reluctant to make bulk purchases in anticipation of further softening of prices. This has been dampening the market sentiments and pushing distributors/ traders to reduce their offer prices to conclude sales,” major distributor sources shared with SteelMint.
• Moreover, the slack performance of major flat steel consuming sectors such as infrastructure and construction is weighing on sales momentum and, in turn, demand for steel from allied industrial consumers such as heavy engineering, OEMs and other MSMEs.
• Trade channel participants are expecting mills to provide some relief by way of rebates or discounts as the difference between trade market prices and list prices of mills is widening every passing week.
• On the exports front, SteelMint’s HRC (SAE1006) export index dropped $50/t this week to $860/t FOB east coast India. Offers to the Middle East market dropped to $890-920/t CFR contrasted against last week’s $950-980/t CFR for June- early July deliveries. Meanwhile, after a gap of two months, Indian mills resumed offering HRCs to the Vietnamese market at $850/t CFR as demand continued to remain slow and weighed on offers to both Europe and the Middle East.