Weekly round-up: Domestic semi-finished steel market falls as finished steel prices tumble

Semi-finished steel prices recorded a sharp fall during week 46 (8-13 Nov'21). Offers declined to the tune of INR 1,100-2,300/t with a major drop witnessed in the billet markets of Ahmedabad, Rourkela and Raipur.

India's finished long steel market via the induction furnace (IF) route saw weak demand. Rebar prices declined by up to INR 2,700/t, w-o-w, SteelMint assessment shows.

The domestic flat steel market remained volatile. HRC prices increased in the first half before declining marginally towards the weekend.

Iron ore and pellet

• Odisha Mining Corporation (OMC) has scheduled a seized iron and manganese ore e-auction for 18 Nov'21. The total quantity to be auctioned comprises 583,055 t of iron ore lumps and fines as well as 895 t of manganese ore lumps.
  
  
• SAIL conducted an auction for 60,000 t of iron ore fines (Fe 60% - indicative) on 11 Nov'21 from its Barsua iron ore mines in Odisha. The base price was INR 5,300/t FOR (inclusive of royalty and additional levies). According to updates from sources, the auction failed to fetch any response due to the high base price.
  
  
• Serajuddin & Co. has resumed iron ore offers from Odisha. The merchant miner is offering Fe 60.5% fines at INR 4,200/t and Fe 59% fines at INR 3,400/t. Prices are inclusive of royalty, DMF and NMET. The High Court of Odisha has granted a month's time to the ex-lessees of auctioned mines to lift their material, following which the miner has resumed offers.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,650/t DAP Raipur.
  
  
• SteelMint's India pellet export index (Fe 64%, 3% Al, FOB east coast) fell by $18/t, w-o-w, to $124/t. The index has fallen to a new low in over a month, as per data maintained with SteelMint.
  
  
• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $2/t, w-o-w, to $25/t FOB east coast India. Trading remained muted on lower export realisations.
  
  

Coal

Australian premium low-volatile (PLV) hard coking coal (HCC) prices saw a marginal correction of 2% over the past week.

• However, prices of the weaker grades such as PCI and semi-soft held firm due to continued supply tightness caused due to heavy rainfall in Queensland, Australia.
  
  
• In the Chinese coking coal market, supply tightness and restocking demand continued to provide support to prices.
  
  
• Latest prices of premium HCC are assessed at around $399.00/t FOB Australia, $530.00/t CNF China and $421.65/t CNF India.
  
  
• South African RB2 portside prices remained largely unchanged, averaging at INR 11,000/t amidst lower demand from sponge iron producers.
  
  
• South African RB1 prices also edged lower, trading at $137/t in tandem with the decline in global coal prices. Discounts for RB2 and RB3 were assessed at $13/t and $25/t, respectively.
  
  

Ferrous scrap

The imported scrap market remained downcast for the second successive week. The market remained mostly quiet and not much activity was reported due to negative domestic sentiments. Meanwhile, only limited offers were available, as major suppliers were more interested in neighbouring countries like Pakistan.

Market sources expect clear directions to emerge from next week. However, prices are unlikely to correct as the EU scrap export ban is looming and the approaching winter may keep prices supported.

• Shredded scrap offers remain stable at $560-565/t CFR Nhava Sheva levels.
  
  
• UAE-origin HMS 1 is being offered at $505-510/t CFR levels, while HMS 1&2 (80:20) from the same origin being offered at $495-500/t CFR levels.
  
  

Ferro alloys

The overall ferro alloys market turned bearish and prices fell in line with lower demand. Moreover, the easing of environmental restrictions in China has also contributed to a downward correction in ferro alloys prices.

• Silico manganese prices reduced this week owing to increased production in China amid falling Chinese futures. SteelMint assessed current market prices of 60-14 grade of silico manganese at INR 100,000-104,000/t exw Raipur, Durgapur and Vizag respectively (major manganese alloys production hub in India).
  
  
• Domestic ferro manganese producers decreased prices to attract orders. Ferro manganese prices are at INR 120,000/t exw in both Durgapur and Raipur.
  
  
• Ferro chrome prices shrunk due to low demand from China. An increase in production in China led to reduction in buying interest. The price of ferro chrome (HC 60) fell by INR 13,000/t, w-o-w, to INR121,700/t exw-Jajpur.
  
  
• Ferro silicon prices for HC-70% grade fell by INR 17,650/t w-o-w to INR 250,600/t after prices in China decreased on easing power restrictions. Meanwhile, Bhutanese producers are offering at around INR 260,000/t exw.
  
  

Semi-finished

Indian semi-finished steel prices decreased sharply, as per SteelMint assessment. Domestic billet prices fell by INR 1,500-2,100/t across regions, with a major drop in prices seen in Ahmedabad, Rourkela and Raipur. Similarly, low demand and falling billet prices weighed on sponge iron offers, as prices declined by INR 1,100-2,300/t.

• Indian sponge iron export offers fell by $20/t to around $460/t CPT Benapole, equivalent to $490/t CFR Chittagong, Bangladesh. About 6,000 t of deals were reported this week.
  
  
• Steel grade pig iron prices fell further on limited demand in the spot market following correction in steel prices. Prices fell by up to INR 1,900/t, with a major fall of INR 1,700-1,900/t seen in the eastern and central regions, followed by INR 300/t in the northern India.
  
  
• IF-route billet export offers fell by $25-30/t, w-o-w, to $580-585/t exw-Durgapur, equivalent to $605-610/t, CPT Nepal, via road delivery. A few parcels were sold this week.
  
  
• An Indian steel mill has concluded an export tender for 40,000-44,000 t of steel grade pig iron for end-Nov shipment at $570/t CFR Turkey (equivalent to $515-520/t FOB India).
  
  
• SAIL conducted an auction on 9th Nov for 8,000 t of basic grade pig iron from Bhilai Steel Plant (BSP). The entire quantity booked at a weighted average price of INR 40,980/t exw.
  
  
• Tata Metaliks has reduced basic grade pig iron prices by INR 1,400/t to INR 43,000/t exw-Kharagpur. Prices are applicable for Kolkata and Howrah.
  
  
• Vizag Steel has floated two ocean sale export tenders for 30,000 t of steel bloom (150x150mm, 3SP/4SP grade) and 20,000 t of billet (90x90mm, C20MMn Gr.A). The due date for both tenders is 16 Nov.
  
  
• AIL held an auction for one rake (2,000 t) of basic grade pig iron on 10 Nov from its IISCO plant. The entire quantity was booked at a weighted average price of INR 41,100/t exw.
  
  
• Vizag Steel, has scheduled an e-auction for around 1,000 t of steel grade pig iron on 17 Nov.
  
  

Finished long

Demand for long steel produced through the induction furnace route remained weak across markets. On a weekly basis rebar prices declined by up to INR 2,700/t, w-o-w, SteelMint assessment shows. A sharp fall in raw material prices and rising inventories of finished steel owing to lack of buying enquiries and transactions in the spot market prompted manufacturers to slash prices, SteelMint learnt from trade sources.

• Trade reference prices of IF rebar (Fe 500, 10-25mm) are assessed at INR 47,100-47,400/t exw-Raipur and INR 50,900-51,300/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers was INR 1,200-1,500/t and the trade reference price of 200mm angle stood at INR 52,400-52,800/t exw-Raipur.
  
  
• Trade discounts given by Raipur-based wire rod suppliers were INR 2,000-2,300/t and trade reference prices stood at INR 46,200-46,500/t exw-Raipur and INR 46,300-46,500/t exw-Durgapur for size 5.5mm.
  
  

Finished flat

• SteelMint's assessment for HRC, HR-plates and CRC witnessed an uptick in the first half of the week as the market resumed after the Diwali holidays. However, market sentiments weakened with the continual decline in Chinese HRC (SS400) offers which fell to $810-820/t FOB from $860-890/t FOB a week back.
  
  
• Procurements from end-users remained slow even after the holidays which also brought down the pace of restocking activity. This in turn led to a marginal correction in HRC and CRC prices towards the end of the week.
  
  
• Tata Steel Ltd is likely to commence maintenance at its two steel melting shops, LD2 for eight days by end-Nov, and LD3 for 10 days in early Dec. The combined production impact is approximated at around 270,000 t. In addition, the Kalinganagar plant will take a seven-day maintenance shutdown in Dec, with the impact on production likely to be of 100,000 t.
  
  
• Flat steel prices may remain volatile, yet a steep correction is unlikely in the near term provided the scope for imports remains limited, even with Chinese export offers falling lower than domestic prices. China apart, a voyage time of 45 days from Russia and limited export allocations from South Korea and Japan might keep inclination for imports low.