Weekly round-up: Domestic billet prices drop, IF-route longs volatile in week 32

Semi finished

Domestic billet offers, on a weekly basis, fell sharply by INR 100-1,100/tonne (t) across regions and the major fall in prices was reported from northern India (Mandi Gobindgarh) by INR 1,100/t. The sponge iron market observed volatility in prices by INR 100-400/t on fluctuating demand.

• Tata Metaliks raised foundry grade pig iron prices by INR 1,100/t ($15/t) to INR 42,900/t, and the basic grade pig iron offers were up by INR 900/t to INR 40,100/t. Prices are exw-Kharagpur and applicable for Kolkata and Howrah markets.
  
  
• SAIL scheduled an auction for 4,000 t of steel-grade pig iron from its Rourkela Steel Plant (RSP) in Odisha on 9 Aug'21.
  
  
• Vedanta Resources raised pig iron prices by INR 600/t for Gujarat and Maharashtra-based buyers. Current offers for foundry grade pig iron are assessed at INR 46,000-46,100/t delivered to Ahmedabad.
  
  
• Induction grade (IF) billet export offers increased up to by $5/t w-o-w with fresh offers hovering at $580/t, exw-Durgapur (equivalent to $605-610/t CPT Nepal).
  
  
• Steel-grade pig iron prices rose by INR 100-600/t across regions with the biggest hike seen in central India, by INR 500-600/t, followed by INR 100-400/t in the north and eastern regions. Active demand but a marginal supply tightness continued support pig iron prices in India.
  
  

Finished longs

India's induction furnace-route finished long steels market observed volatility in prices this week, which varied across regions. In the western part, slight improvement in buying enquiries and transactions for rebar steel in the spot market at the start of the week supported the increase in TMT prices by up to INR 700/t w-o-w. In the other major supplying regions, rebar prices declined by up to INR 1,100/t w-o-w, owing to limited demand and fluctuations in semi-finished steel prices which pressurised the rebar sellers to adjust the trade prices depending upon raw material price movements and demand, sources told SteelMint.

• Trade reference induction-grade rebar steel prices of 10-25 mm were assessed at INR 44,700-45,100/t exw-Raipur, at INR 48,300-48,700/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 800-1,100/t and trade reference prices for the 200-mm angles stood at INR 49,300-49,700/t exw-Raipur.
  
  
• Trade discounts given by Raipur-based wire rod manufacturers were at INR 1,200-1,400/t while trade reference prices stood at INR 45,900-46,000/t exw-Raipur, and at INR 45,500-45,700/t exw-Durgapur, for size 5.5 mm.
  
  

Iron ore and pellets

• NMDC cut iron ore prices for Aug'21 deliveries by INR 200-350/t ($3-5/t).
  
  
• South India-based pellet producer KIOCL issued an export tender for sale of 55,000 t of Fe 63% grade pellets with alumina content of 2% on 5 Aug'21. The tender was concluded at around $195/t FoB.
  
  
• SteelMint's bi-weekly domestic pellet index, PELLEX, increased by INR 150/t to INR 14,550/t DAP Raipur on 6 Aug'21.
  
  
• SteelMint's pellet export index (Fe 64%, 3% Al, FoB east coast) recorded a drop of around $13/t w-o-w and currently stands at $183/t. The index has fallen to a nearly four-month low.
  
  
• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $7/t w-o-w to $69/t FoB east coast India. The index has fallen to an 11-month low, as per data maintained with SteelMint.
  
  

Ferrous scrap

India's imported scrap market remained less active this week, as participants opted to wait and watch. The offers remained less workable for the majority of the buyers due to price disparities when compared to domestic scrap. In addition, most of the mills were procuring domestic material and not many active bookings of imported scrap were reported during the week.

• SteelMint's assessment for containerised shredded scrap stands at $530-535/t CFR Nhava Sheva, unchanged w-o-w.
  
  
• UAE-origin HMS 1 offers were at $485/t CFR Nhava Sheva and that for the UK-origin at $480-485/t CFR, both prices mostly firm w-o-w.
  
  

Ferro alloys

The overall ferro alloys market saw a mixed trend with manganese alloys and ferro silicon prices correcting, while ferro chrome prices registered a historic high.

• Silico manganese prices increased w-o-w amidst higher demand from steel mills. As per SteelMint's assessment, the current market prices of silico manganese for 60-14 grade are at INR 94,850/t exw-Durgapur and at INR 96,250/t exw-Raipur. Export inquiries have risen and producers are offering at $1,420/t FoB India for the 65-16 grade.
  
  
• Ferro manganese prices inched up in line with increased steel prices. Currently, prices are hovering at around INR 96,000-98,000/t exw for both Raipur and Durgapur owing to robust demand in the domestic and international markets.
  
  
• Ferro chrome prices are skyrocketing owing to supply shortfall in the domestic market, with fewer producers offering in the spot market. Meanwhile, Vedanta's ferro chrome auction set the tone for the market as it received aggressive bidding. SteelMint's assessed current market price of ferro chrome is at INR 129,000/t exw-Jajpur, with few producers offering even higher.
  
  
• The current market price of ferro silicon is down by INR 2,250/t w-o-w to INR 129,500/t exw-Guwahati after Bhutan-based plants reduced their prices to INR 127,500/t, owing to selling pressure. However, producers expect the prices to regain momentum soon.
  
  

Finished flat

This week domestic HRC trade prices witness an increase after the mills announce a revision in flat steel prices for August deliveries. Mills have withdrawn the rebate and raised HRC prices by around INR 1000/t, keeping the list prices untouched. Notably towards the beginning of last month, mills had offered HRC at INR 68000/t (exy-Mumbai).Prices do not include GST extra @18%.

On the other hand, SteelMint's benchmark price assessments of 2.5-8 mm IS 2062 hot-rolled coils (HRC) increased by INR 1,500/t to INR 66,500-67,000/t ($896-909) exy-Mumbai as compared to INR 65,000-66,000/t seen a week ago. The prices mentioned above are exclusive of GST @18%.

Factors driving domestic HRC prices are mentioned below:

• Wide gap between mill price and market price- There still is a decent gap of around INR 1000-1500/t between the mills' list price for HRC and the trade prices. The mills have maintained their list prices at INR 68,000/t and trade prices in Mumbai are around INR to INR 66,500-67,000/t.
  
  
• Higher realisation in the export market- Indian mills have collectively booked 40,000 t HRC to UAE at a $975-980/t CFR basis for Sept delivery. Thus mills continue to explore export opportunities on higher price realisations. Also increased export premium will lead to an uptick in domestic prices.
  
  
• Rebound in buying activities- Traders and major distributors have resumed buying HRC in anticipation of further hikes in prices by Indian mills.
  
  

Outlook- Indian mills will review the market situation and may revise the prices further this month. Also since Chinese mills are restricting exports to major markets which turned out to be a good opportunity for Indian mills to explore new destinations in overseas markets. In this way, better realisations in exports will push domestic prices in near term

Reference prices as on 7th Aug'21 (Week 32)
Prices are exw & exclusive of GST

Indian export reference prices as on 7th Aug'21
Prices in $/t
Source: SteelMint Research