Weekly round-up: Semis market remains upbeat even as flat steel trade prices decline

The domestic steel market remained volatile during week 16 (11–16 Apr’22). Semi-finished steel prices increased in the range of INR 500-3,300/tonne (t). Domestic induction furnace-route finished long steel offers surged INR 1,000-2,900/t w-o-w.

The trade reference prices for finished flat steel decreased by up to INR 2,200/t for HRC and CRC.

Iron ore and pellets

• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,600/tonne (t) DAP Raipur on 15 Apr, down INR 100/t compared with the last assessment on 12 Apr.
• India’s iron ore export market sentiments continued to remain supported on enquiries from China amid thinning margins in finished steel. SteelMint’s weekly index for India’s low-grade iron ore fines (Fe 57%) exports stood at $60/t FOB east coast, increasing by $6/t w-o-w.
• India’s pellet (Fe 63%, 3% Al) export index FOB east coast decreased $4/t w-o-w to $161/t from $165/t on 6 Apr. Local mills in China have reached their break-even point following the increase in iron ore and coke prices, and COVID-19 has had a moderate impact on social consumption. On the other hand, filling up of credit lines in the EU and sizeable bookings from India last week have kept demand slow this week from EU buyers.
• State-run Odisha Mining Corporation (OMC) has scheduled an auction for iron ore fines and lump on 18 Apr. The miner decreased the base price for fines by up to INR 350/t and for lump by up to INR 875/t as against the last auction on 15 Mar.

Coal

• This week, Australian premium hard coking coal price moved up by $102/t to $506/t FOB. The prices increased amid the EU’s ban on Russian coal imports and improved demand. However, towards the end of the week buyers retreated to the sidelines and adopted a wait-and-watch approach.
• Portside offers for RB2 (5500 kacl/kg NAR) coal remained firm at INR 21,000-22,000/t amid limited buying appetite on elevated imported coal prices.
• South African RB1 prices for Apr rose by $38/t w-o-w to $309/t FOB amid rising demand from European countries following sanctions on Russia.

Ferrous scrap

Ferrous scrap import deals in India picked up towards the close of the week after remaining inactive earlier in the week. With the increase in domestic scrap and steel billet prices towards the weekend, imported HMS scrap trades gained some momentum. However, trades continued to happen for small quantities, while suppliers are trying to sell their material to India in the absence of active enquiries from neighbouring countries during Ramadan.

• Fresh offers for UK/EU-origin shredded are being quoted at $645-650/t CFR levels, down significantly by $10-15/t w-o-w. A few deals for small quantities were concluded at these offers.
• 2,000 t of South Africa- and Poland-origin HMS 1&2 (90:10) were sold at $590-595/t CFR Chennai.
• A Punjab-based steelmaker booked UAE origin HMS 1&2 (90:10) at $565/t CFR Mundra.
• A sizable quantity of Middle East-origin HMS 1 and PNS were booked at $565-570/t CFR.

Ferro Alloys

• Indian silico manganese (60-14) prices decreased w-o-w amid low demand and oversupply of material in the domestic market. According to SteelMint’s assessment on 15 Apr, silico manganese prices were at around INR 103,500-106,000/t exw Durgapur, Raipur and Vizag.
• Indian ferro manganese (HC 70%) prices inched down w-o-w as buyers negotiated hard. Ferro manganese prices were hovering around INR 107,000-110,000/t exw  Durgapur and Raipur on 15 Apr.
• Indian ferro chrome (HC 60%) prices witnessed an upward correction w-o-w owing to high cost of production amid rising chrome ore, coal and coke prices. Ferro chrome (HC 60%) prices are at INR 120,000/t exw Jajpur.
• Indian ferro silicon (70%) prices fell w-o-w in order to maintain price parity with international ferro silicon prices. According to SteelMint’s assessment on 15 Apr, ferro silicon prices were hovering around INR 170,500-171,000/t exw Guwahati and Bhutan. However, some major Bhutanese producers announced new prices of around INR 165,000/t exw towards the end of the week.

Semi-finished steel

On a weekly basis, domestic sponge offers increased sharply by INR 500-2,500/t across regions and the major rise of INR 2,500/t was reported from Durgapur, east India. Similarly, billet prices also rose by INR 2,000-3,300/t w-o-w.

• An eastern India-based mill has concluded an export tender for 25,000 t of steel grade pig iron for May shipment at around $835-840/t FOB.
• SteelMint’s bi-weekly assessment for Indian billet export (150*150mm, 3SP/4SP, BOF route) stood at around $750-770/t FOB on 14 Apr, stable w-o-w.
• SAIL held an auction for 4,800 t of basic pig iron (in 48 units) on 12 Apr from the Rourkela Steel Plant (RSP). Out of the total material on offer, buyers booked around 3,200 t at INR 57,950/t exw.
• Vizag Steel floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP) on FOB ST. delivery basis against 100% advance payment terms. The due date for the tender is 19 Apr.
• Vedanta Resources raised prices further for buyers in Gujarat and Maharashtra. Current offers for foundry grade pig iron are assessed at around INR 67,500/t delivered (DAP) to Ahmedabad and INR 66,500/t DAP Kolhapur.
• Indian sponge iron export offers fell to around $490/t CPT Benapole, equivalent to $520/t CFR Chittagong, Bangladesh, as per SteelMint’s weekly assessment. About 10,000 t deals were reported this week. Meanwhile, fresh offers floated were at $500/t CPT Benapole.
• Indian IF route billet export demand improved from Nepal and around 3,000 t of deals were reported at $730-735/t exw eastern India, while fresh offers increased to around $745-750/t exw Durgapur, equivalent to $770/t CPT Nepal.
• Spot steel grade pig iron prices rose by INR 600-3,300/t, with the major increase of INR 3,000-3,300/t being recorded in the eastern region, followed by INR 600-1,500/t in the central and northern regions. Rebound in coal and coke prices and active exports supported the domestic pig iron market.

Finished long

India’s induction furnace finished long steel market witnessed an improvement in buying enquiries and trades this week in most of the major supply centres. However, in a few markets it was observed that bulk trades were lacking but improved market sentiments and rising costs of raw material supported manufacturers to increase prices or adjust trade discounts as per inventory levels at mills and booking orders in hand.

On a weekly basis, prices of rebar steel in most markets increased by INR 1,000-2,900/t, while in a few markets a marginal correction was observed of up to INR 500/t w-o-w.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25mm size was assessed at INR 60,600-61,000/t exw Raipur and INR 63,000-63,400/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 1,000/t and the trade reference price of 200mm angle stood at INR 65,600-66,000/t exw Raipur.
• Trade discounts given by Raipur-based wire rod suppliers hovered around INR 2,000/t and the trade reference prices stood at INR 61,000-61,500/t exw Raipur and INR 61,500-61,800/t exw Durgapur for 5.5mm wire rods.

Finished flat

Decline in offers and deals concluded at lower prices by the steel majors in the overseas markets along with weak end-user demand in the domestic market weighed on trade prices across product categories.

SteelMint’s benchmark assessment for HRC (IS 2062, 2.5-8mm) stood at INR 68,000-69,000/t ($891-905/t) exy Mumbai at the beginning of March, which rose sharply to a new high of $78,500-79,500/t ($1,029-1,042/t) exy Mumbai in the first week of April. Prices mentioned exclude GST at 18%. Thus, already slow demand from the end-user industries weakened further this week, forcing distributors and traders to reduce their offer levels to boost buying interest.

Buying sentiments also took a hit due to the decline in offer levels of major mills in the export markets. For instance, a mill booked some 8,000-10,000 t of HRC (SAE1006) at $1,000/t CFR UAE, down from $1,050-1,110/t CFR earlier this week. Similary, another mill booked 20,000 t HRC (S275) at $1,150/t CFR Italy, south Europe. However, the offers as per SteelMint’s assessment stood at around $1,200-1,250/t CFR Antwerp, north Europe, earlier this week, which dropped by $35/t to $1,190/t CFR towards the weekend.

Both the deals were for end-May or early-Jun deliveries.