Weekly round-up: Indian domestic steel market volatile

The domestic steel market remained volatile during the week 6 (31 Jan'22 - 5 Feb'22). Semi-finished steel prices saw fluctuations ranging INR 100-900/t while induction route-rebar market saw mixed trends.

Consistently rising raw material prices forced rolling mill owners to raise their offers. However, buyers kept to the sidelines due to which moderate trade activities were witnessed throughout the week.

Iron ore and pellet

• Odisha Mining Corporation (OMC) had scheduled an iron ore fines auction (Fe 60-62%) for 80,000 t on 1 Feb'22 of which 79,000 t (99%) received bids. The auction received flat bids i.e. in line with the base price of INR 4,000/t ex-mines, including royalty, DMF and NMET.
  
  
• The iron ore e-auction conducted by the Industrial Corporation of Odisha (IDCOL) on 1 Feb'22 for 19,000 t of calibrated lump ore (CLO) from the company's Roida 'C' mine in Odisha not only received active participation but also witnessed a sharp uptick in prices. Bid prices for lump ore (5-18mm, Fe 62-65%) rose by INR 2,100-2,700/t against the floor price of INR 7,500/t to INR 9,600-10,200/t.
  
  
• The Goa government organised the 27th e-auction for 2.217 mnt of iron ore on 19 Jan'22. About 1.45 mnt (66%) was booked out of the total offered quantity.
  
  
• India's pellet (Fe 64%, 3% Al) export index (FOB east coast) fell marginally by $3/t to $163/t compared to $166/t on 29 Jan'22. The pellet export market remained silent after witnessing active trades last week in the absence of bids from China during the the ongoing New Year holidays.
  
  
• SteelMint's weekly index for India's low-grade iron ore fines (Fe 57%) exports stood at $43/t FOB east coast India, up by $3/t w-o-w. The iron ore export market witnessed some improvement in sentiments following the hike in global iron ore prices ahead of the CNY holidays.
  
  

Coal

• Australian premium low-volatile hard coking coal FOB prices remained stable w-o-w basis amid CNY holidays.
  
  
• Latest prices for the premium HCC grade were assessed at around $445.5/t FOB Australia and $464/t CNF India.
  
  
• South African RB2 (5500NAR) portside prices remained range-bound amid limited stock at port and sluggish buying interest from sponge iron manufacturers.
  
  
• South African RB1 prices for Feb'22 fell by 6/t w-o-w to $176/t, FOB basis. RB2 was sold at a premium of $5/t over index while RB3 discount was assessed at $5/t.
  
  

Ferous scrap

• India's imported scrap trade improved in the last few weeks. Buyers turned active in making bookings for Mar'22 deliveries to stock up inventory propped up by supportive domestic semi-finished prices.
  
  
• UK-origin shredded was being offered at $545-550/t CFR levels. However, deals remained muted due to high offers. Market suppliers were highly interested in trading shredded material in Pakistan and Bangladesh at a higher price, SteelMint understands.
  
  
• Offers for Dubai-origin HMS 1 and HMS 1&2 (80:20) were quoted at $500-505/t and $495-500/t CFR levels respectively, up by $5-10/t w-o-w.
  
  
• In a recent deal, a decent quantity of South America-origin HMS 1&2 (80:20) was booked at $510/t CFR Chennai.
  
  
• The price gap between domestic material and imported one narrowed down. Earlier a month ago, imported prices were higher by INR 2,000/t over domestic prices. SteelMint's assessment for HMS (80:20) was at INR 38,400/t ($514/t) DAP Mumbai, up by INR 500/t w-o-w, while prices in Jalna were assessed at INR 39,000/t DAP ($522/t), up INR 1,000/t w-o-w.
  
  

Ferro alloys

• The overall market saw a downward momentum with a marginal decline in manganese alloys prices and a sharp all in ferro silicon prices. However, ferro chrome prices were mostly stable this week.
  
  
• Indian silico manganese prices (60-14) dropped marginally by 1% w-o-w as buyers showed reluctance in booking the material at higher levels. According to the assessment on 4 Feb'22, Durgapur producers were offering for 60-14 grades at INR 99,000/t exw while Raipur prices were at INR 101,500/t exw.
  
  
• Indian ferro manganese (HC70%) prices dropped marginally by 2% w-o-w as some major deals were concluded at lower levels. Producers were offering at around INR 99,000/t exw- from both Durgapur and Raipur.
  
  
• Indian ferro chrome (HC60%) prices remained range-bound w-o-w with marginal fluctuations owing to muted domestic demand. China demand was muted this week due to the New Year holidays. According to SteelMint assessment on 03 Feb'22, the current market prices of ferro chrome (HC60%) are at INR 104,750/t exw- Jajpur.
  
  
• Indian ferro silicon (70%) prices dropped by 7% w-o-w due to high inventories held with Bhutan producers. The current market prices are hovering at around INR 144,000- 145,000/t exw- from both Guwahati and Bhutan, as assessed on 04 Feb'22.
  
  

Semi finished

The domestic semi finished steel market remained volatile with fluctuation in offer prices of the mid sized mills by INR 200-900/t following volatile sponge iron offers.

• SAIL scheduled an auction for 9,000 t of steel grade pig iron in 90 units from Rourkela Steel Plant (RSP) on 9 Feb'22.
  
  
• IF-route billets offers rose slightly by upto by $5/t, w-o-w, to $640/t exw-Durgapur, equivalent to $665/t CPT Nepal.
  
  
• Sponge iron (FeM 80%, lumps 100%) export prices to Bangladesh remained stable this week at $510/t CPT Benapole, equivalent to $540/t CFR Chittagong, Bangladesh, as per SteelMint assessment.
  
  
• SAIL held an auction for 3,100 t of basic grade pig iron (in 31 units) on 2 Feb'22 from Rourkela Steel Plant (RSP). The entire quantity was booked at a weighted average price of INR 47,620/t exw.
  
  
• Tata Metaliks raised basic grade pig iron prices by INR 1,100/t and foundry grade by INR 1,800/t ($24). Offers for basic grade were at INR 47,400/t and foundry grade at INR 50,200/t. Prices are applicable for Kolkata and Howrah.
  
  

Finished long

India's induction-route finished long steel market witnessed mixed trends in terms of trade enquiries and transactions in the spot market. Higher prices made buyers cautious resulting in limited bookings. However, consistent rising raw material prices pushed rebar manufacturers to increase their offers and adjust prices as per demand in the spot market.

On a weekly basis, rebar steel prices increased by up to INR 1,300/t in most locations, while a marginal drop of INR 100-200/t was seen in the few markets, SteelMint assessment shows. This week, blast furnace-route rebar producers also announced a hike in prices by INR 1,500-2,000/t for Feb'22.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 51,600-52,000/t exw Raipur and INR 55,200-55,600/t exw Jalna.
  
  
• Trade discounts given by Raipur- based heavy structural steel manufacturers were around INR 1,000/t. Trade reference price of 200 mm angles stood at INR 56,800-57,200/t exw Raipur.
  
  
• Trade discounts given by Raipur- based wire rod suppliers were at INR 1,000-1,300/t. Trade reference prices stood at INR 51,700-52,000/t exw Raipur and INR 52,300-52,500/t exw Durgapur, size 5.5 mm.
  
  

Finished flat

• Indian flat steel trade reference price continued on the upward track with major mills increasing list prices of HRC and CRC for early-Feb'22 sales in the market.
  
  
• The private integrated steel major AM/NS I had increased its list prices across the flat steel product category in tune of INR 1,000-2,000/t, JSW raised galvanised coil prices by INR 1,500/t and JSPL took an INR 3,000/t increase in plate prices earlier this week. Rising prices of flat steel products in the global market along with those of raw materials are being accorded as reasons behind the hike.
  
  
• Furthermore, domestic realizations have been better as compared with those in the overseas market. A slight improvement in domestic market demand was marked in the northern and western regions as per.
  
  
• SteelMint's India HRC (SAE1006) export index increased by $20/t to $800/t FOB east coast as mills increased offer levels for their March bookings. HRC export offers to major exporting destinations increased by around $15-20/t this week with offers at $830/t CFR Vietnam and a deal concluded for March delivery at $840/t CFR UAE towards the end of previous week.