Weekly round-up: Semis market sees slight uptrend even as flat steel trade prices decline

The domestic steel market during week 33 ( 8-13 August, 2022) saw semi-finished steel prices inching up in the range of INR 200-2,600/tonne (t) across markets in India.

However, domestic induction furnace finished long steel offers rose by up to INR 1,200/t w-o-w. The trade reference prices for finished flats declined in the range of INR 100-1,600/t for HRC and CRC.

Iron ore and pellets

• State PSU miner OMC has scheduled an iron ore auction on 19 Aug’22. Around 1.005 mnt of lump ore and 1.406 mnt of iron ore fines will go under the hammer. The base price of the auction is yet to be disclosed. In the previous auction, the merchant miner received a tepid response, as out of 2.757 mnt on offer, 1.097 mnt (40%) received bids.
• NMDC has raised iron ore prices by up to INR 240/tonne (t) for August deliveries this week. The company has raised prices of lump ore by up to INR 200-240/t and fines by INR 100/t, effective from 11 August.
• The spot price of iron ore in China fell on 12 August amid weaker seaborne buying interest. Benchmark Fe 62% fines prices inched down by $1.75/t to $108.85/t CFR China.
• SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 9,200/tonne (t) DAP Raipur on 12 August, stable compared to the last assessment on 9 August.The index remained stable for the week amid low trade.

Coal

• Portside RB3 (4800 NAR) prices fell by INR 300/t w-o-w to INR 15,200/t at Vizag Port amid weak procurement demand from sponge iron manufacturers following increased usage of alternate origin coal.
• South African RB1 (6000 NAR) prices rose to $315/t FOB with strong demand expectation from Europe as its embargo on the import of Russian coal has come into effect this week.
• Australian premium hard coking coal prices rose by $36/t w-o-w to $239/t FOB and $258/t CNF India. The push is majorly because of increased demand especially from India.

Ferrous Scrap

• India’s imported scrap prices increased on active Turkish buying, whereas already piled-up stock with Indian mills and subdued finished steel demand amidst holidays may slow down the trade. Also, Indian buyers held fresh bookings due to lower bulk offers and few bulk cargoes booked in June are arriving.
• SteelMint’s assessment of Europe-origin shredded scrap in containers stands at $495/t CFR Nhava Sheva, up $25/t w-o-w.
• Dubai origin HMS 1 touched $490-500/t CFR levels towards the weekend, up by $10-15/t CFR w-o-w.

Ferro Alloys

• As per SteelMint’s assessment on 12 August, domestic silico manganese prices increased by around 2-4% w-o-w to INR 76,700/t ex-Durgapur, INR 75800/t ex-Vizag, and INR 77500/t ex-Raipur. Moderate inquiries in the domestic market kept the prices uptrend during this period.
• On 12 August, Indian ferro manganese prices were rangebound with slightly fluctuation by 2% w-o-w to INR 80,000/t ex-Durgapur and ex-Raipur at INR 80,100/t were range bound on weekly basis. Deal as per requirement basis in special steel led the prices stable of ferro manganese.
• Indian ferro chrome prices further dropped by INR 1,900 w-o-w to INR 94,600/t exw- Jajpur as buyers negotiated hard to secure material at lower price, assessed on 10 August.
• Indian ferro silicon prices rose this week owing to hike in raw material costs. According to SteelMint’s assessment on 12 August, ferro silicon prices were hovering at around INR 144,250/t exw- Guwahati, while Bhutan’s offer was at around INr 145,250/t exw.

Semi finished

Indian semi-finished steel prices increased, as per SteelMint assessment. Domestic billet prices increased by INR 400-2,600/t across regions, with the major increase of INR 2,600/t seen in Mumbai. Similarly, sponge iron prices also rose by INR 200-1,500/t w-o-w.

• SAIL-Bokaro Steel Plant held steel grade pig iron auctions for 2,000 t (1 rakes) and 150 t on 10 August. The entire quantity received bids at around INR 45,200/t and 46,250 exw respectively.
• Vedanta Resources reduced pig iron prices for Gujarat and Maharashtra-based buyers by INR 500/tonne (t). Current offers for foundry grade pig iron are at INR 56,250/t delivered (DAP) to Ahmedabad and Kolhapur.
• Rourkela Steel Plant (SAIL) held an auction for 2,000 t of steel grade pig iron on 8 Aug’22. The entire quantity was booked at an average price of INR 45,642/t exw.
• About 10,000 t (4 rakes) of sponge iron export deals were reported to Nepal this week. Current offers hovered around $480-485/t CPT Nepal for FeM 79-80% material (70% lump and 30% fines).
• BF-route billet export offers were stable at around $630/t LTW-eastern India, equivalent to $640-645/t CPT Nepal. However, no fresh deals were reported this week due to bid-offer disparities.
• Spot prices of steel grade pig iron volatile this week, offers in north-east regions surged by INR 300-1,200/t, while it fell by INR 200-600/t in central India.

Finished Long

India’s finished long steel market of the induction furnace route saw a moderate trades and transactions in the early part of this week, especially in the central region. A few markets in the southern region saw slower buying enquiries in the spot market. However, raw material (sponge iron and billet) prices also trended upward throughout the week, which drove suppliers to raise offers.

Later on in the week, finished steel demand for rebar and wire rods remained slow and dull sales were witnessed, as buyers turned cautious about taking positions, opting for a wait-and-watch approach as regards procuring bulk material at higher offers. On the other hand, manufacturers adjusted offers and offered tradable discounts, depending upon payment terms and booking orders which differed across locations.

• On a weekly basis, prices of rebar surged INR 300-1,000/t w-o-w across the region, while in Mumbai prices increased by INR 1,200/t, as per SteelMint assessment.
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 52,200-52,600/t exw Raipur and INR 56,000-56,400/t exw Jalna.
• Trade discounts given by Raipur-based heavy structural steel manufacturers are around INR 1,500-1800/t and the trade reference price for 200 mm angle stood at INR 58,100-58,500/t exw Raipur.
• Trade discounts given by Raipur-based wire rod suppliers are around INR 1,500-1,800/t and trade reference prices stood at INR 52,700-53,300/t exw Raipur, INR 53,300-53,500/t exw Durgapur for size 5.5 mm.
• Sluggish demand amidst adverse weather conditions in many parts of India, coupled with buyers adopting a wait-and-see mode owing to festive holidays, led to a marginal decline in rebar prices over the week.
• SteelMint’s weekly price assessment of rebar (12-32mm, BF-route, IS 1786, Fe500D) stands at around INR 56,500-57,500/t ($710-722/t), down marginally by INR 250/t ($3/t) w-o-w. Prices mentioned are on exy-Mumbai basis, exclusive of GST at 18%.

Finished Flat

• The decline in prices of flat steel products has slowed down. Trades are happening at current price levels for HRC, CRC and plates. However, coated flat steel products are seeing very limited movement out of the distribution network, informed market sources.
• Furthermore, mills taking maintenance shutdowns ahead of regular schedules has led to tightening of supplies in the market. This has also lent support to prices in both the domestic and global platforms.
• On the exports front, SteelMint’s India HRC export index increased by $18/t to $583/t FOB east coast India. Gains in the Chinese futures market and subsequent impact on export offers nudged Indian mills to raise their offers for Vietnam and the Middle East.