Weekly round-up: Semis market remains bearish as finished steel prices edge lower

The domestic steel market noticed dull trends during week 19 (2 May – 7 May’22). Semi-finished steel prices dropped in the range of INR 200-1,800/tonne (t).

Domestic induction furnace finished long steel offers dropped in the range of INR 800-2,400/t w-o-w. Trade reference prices for finished flat fell in the range of INR 500-1,200/t for HRCs and CRCs.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 10,850/tonne (t) DAP Raipur on 07 May 2022, down INR 500/t w-o-w. Reluctance of buyer of buyer to deal at high offer and cheaper landed offers from neighboring Odisha pulled down prices in Raipur.
• On 6 May’22, the spot price of iron ore fell as weak downstream steel demand in China dampened the outlook for iron ore. Benchmark Fe 62% fines prices fell by $6.8/t to $139/t CFR China.
• Iron ore concentrate prices in the Jabalpur region remained range-bound in recent deals. SteelMint’s index for Fe 63% concentrate prices currently stands at around INR 5,600/t exw. Around 60,000 booked concentrates at offers of around INR 5,500-5,800/t exw.
• SteelMint’s weekly index for India’s low-grade iron ore fines (Fe 57%) exports stood at $61/t FOB east coast, up $6/t w-o-w. The index has moved up tracking the hike in futures today after China returned from a weeklong holiday.

Coal

• Portside RB2 (5500 NAR) offers were higher at INR 23,000/t at Gangavaram Port this week amid elevated imported prices and limited vessel arrival from South Africa in the upcoming week.
• South African RB1 prices rose sharply by $50/t w-o-w to $310/t FOB amid logistic concerns at RBCT Port, wherein miners have started deploying trucks amid coal transport disruption via railway line.
• Australian coking coal prices remained largely stable at $517/t wow basis after some volatility throughout the week. The latest prices for the premium HCC grade are assessed at around $517/tonne (t) FOB Australia and $544/t CNF India.

Ferrous Scrap

The ongoing Eid holidays in major countries like Turkey, the UAE, and some parts of South Asia slowed down market activities. Following the global market trend, Indian imported scrap offers have softened. Turkey, the most prominent scrap buyer, was mostly silent last week, with only a few bookings made for US-origin material.

• Many Indian steelmakers and buyers are holding back fresh bookings of imported scrap, waiting to see the next round of bookings made by Turkish buyers to get a clearer market direction.
• In a recent deal concluded towards mid-week, around 1,500 t of UK/Europe-origin containerised shredded scrap was booked at around $590-595/t CFR Nhava Sheva.
• India’s ferrous scrap import prices corrected following the global market trend amidst the ongoing Eid holidays.
• A small quantity of South African HMS 1&2 (90:10) was booked at $580-585/t CFR Chennai earlier in the week.
• Many deals were concluded for UAE-, Yemen- and Mauritius-origin material last week before the holidays, considering the short distance and cost competitiveness.

Ferro Alloys

Indian ferro alloys market saw a mixed trend this week as manganese alloys and ferro silicon prices declined amid selling pressure while ferro chrome prices inched up due to supply constraints.

• Indian silico manganese (60-14) prices fell by around INR 4,000/t w-o-w owing to sluggish demand. Export inquiries were also lagging as most of the demands shifted to China. According to assessment on 4 May, producers were offering for 60-14 grade at around INR 92,000-94,000/t exw, from both Durgapur and Raipur while in export market offers for 65-16 were at USD 1,470/t FOB India.
• Indian ferro manganese (HC70%) demand was also muted. High selling pressure forced producers to reduce their offers by around INR 5,000/t w-o-w. Producers were offering at around INR 94,000-98,500/t exw- Durgapur and Raipur, assessed on 4 May.
• Indian ferro chrome (HC60%) prices remained range-bound w-o-w amid high production cost and supply shortage. Producers were offering at around INR 126,200/t exw Jajpur. However, some producers were also offering at higher levels this week, assessed by SteelMint.
• Indian ferro silicon (70%) prices dropped significantly by around INR 12,000/t w-o-w to INR 145,000/t exw Guwahati as producers from Guwahati were maintaining the prices parity with Bhutan’s offer of around INR 144

Semi finished

This week, Indian Semi finished steel market observed less than average demand as Billet offers plunged in the range of INR 300-1,800/t ($ 4-24).

• While Sponge iron offers dropped by INR 200-900/MT and majorly in Raipur & Rourkela by INR 800-900/t ($10-12) W-o-W.
• SAIL conducted an auction on 5 May for 2,000 t of basic grade pig iron from Bhilai Steel Plant & the entire quantity booked at a weighted average price of INR 56,400/t exw.
• Vizag Steel held a pooled iron auction on 4 May’22. The entire quantity of 1,050 t has been booked at INR 52,500-600/t exw.
• Vedanta Resources reduced foundry grade pig iron prices by INR 1500/t for Gujarat and Maharashtra based buyers. Current offers are at INR 66,000/t delivered (DAP) to Ahmedabad and INR 65,000/t DAP Kolhapur.
• SAIL held an auction for 10,700 t of basic grade pig iron (in 107 units) on 2 May’22 from the Rourkela Steel Plant (RSP). Buyers booked the entire quantity at a weighted average price of INR 55,900/t exw.
• About 9,000-10,000 t of induction furnace-route billets export deals were reported to Nepal at a price range of $700-715/t exw, eastern India basis, equivalent to $725-740/t CPT Nepal. The fresh offers hovering at $735-740/t CPT Nepal.
• A rake of blast furnace (BF)-route billets export deal was also reported at around $755/t CPT Nepal. Offers remained stable considering last week’s deals.
• Steel grade pig iron prices fell by INR 500-1,300/t, w-o-w. Prices remain under pressure due to improvement in supply along with slow demand on seasonal measured furnaces production.

Finished Long

India’s finished long steel market of induction furnace route has witnessed a weak buying enquiries and trades in this week across the regions. Highly volatile semi-finished steel prices on a daily basis makes buyers very confused regarding the market trend, and in this uncertain scenario they procure only as per the need basis.

On the other side manufacturers are observed slowly and gradually inventories are mounting up at mills and by considering various factors like movement of steel billet prices in key markets, prices in other competitive markets producers adjusted the trade prices either by adjusting the trade discount or by fluctuating the offers, SteelMint learned.

On a weekly basis prices in rebar steel fell across the regions by INR 800-2,400/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 59,000-59,400/t exw Raipur, INR 62,100-62,500/t exw Jalna.
• Trade discount given by Raipur- based heavy structural steel manufacturers is over INR 1,000/t and trade reference price of 200 mm angles stood at INR 65,200-65,600/t exw Raipur.
• Trade discounts given by Raipur- based wire rod suppliers are hovering around INR 1,500/t and trade reference prices stood at INR 59,000-59,500/t exw Raipur, INR 59,000-59,200/t exw Durgapur, size 5.5 mm.

Finished Flat

• The prices of flat steel products continued to move down this week similar to the past couple of weeks, weighed down by the weakening of sentiments in both domestic and overseas trades. Trade activities remained lacklustre as market participants held to need-based procurement in anticipation of further softening of prices in the upcoming week.
• Moreover, major steel producers announced their revised list prices earlier this week for early-May sales, adjusting the same against the levels in early-April. For instance, the list prices of HRC (IS2062, 2.5-8mm) were revised to INR 76,000-76,500/t ($988-994/t) for early-May contrasted against the levels of INR 79,000-80,000/t ($1,027-1,040/t) announced for early-April sales. Prices mentioned are on an exy-Mumbai basis, exclusive of GST @ 18%.
• On the exports front, SteelMint’s HRC (SAE1006) export index stood around $910/t FOB east coast India, down by $10/t w-o-w. Offers to the EU market for HRC (S275) dropped to $1,100-1,140/t CFR (down $15/t w-o-w).
• However, offers remained pegged at $950-980/t CFR UAE for June- early July deliveries due to inactive maket amidst Eid holidays since Friday last week. Also, availability of cheaper alternatives in UAE, and issues around opening up of LCs in the EU market continued to keep the inquiries low from these regions.