Weekly round-up: Indian spot steel trade stays volatile

The Indian spot steel trade remained volatile during Week 38 (13-18 Sept'21). The Indian semi-finished market remained supported during this week following increased prices. The prices of sponge iron and billets surged by INR 300-1,200/tonne (t) with a major hike witnessed in central, east and southern regions, by INR 500-1,200/t, w-o-w.

The Indian finished long steels market saw mixed sentiments on a weekly basis. However, wire rods remained supported, with prices rising by INR 200-800/t in the central and eastern regions. Finished steel transactions for induction furnace route re-bar were dull in the central and western regions. Trade discounts were recorded at around INR 400-500/t as per different locations.

Domestic prices of finished flats remained under pressure due to low demand in the market. Hot rolled coils HRC (IS 2062, 2.5-8 mm) prices continued to hover around INR 65,000-66,000/t exy-Mumbai, whereas, CRC (IS 513 Gr O, 0.9 mm) prices declined by INR 2,000/t to INR 73,000-74,000/t exy-Mumbai over the previous week.

Iron ore and pellet

• Steel Authority of India Ltd (SAIL) conducted an auction on 14th Sep for 80,000 t of iron ore fines (Fe 62.5% indicative) from its Bolani iron ore mines in Odisha. The auction received bids for all the material offered at 6,050-6,100/t (loaded on wagon, including royalty, DMF, NMET and the additional amount mentioned in the MMDR Amendment Act).
  
  
• National Mineral Development Corporation (NMDC), has scheduled two iron ore auctions. The first auction is for 151,200 t of Fe 64%-67% grade material from its Bacheli mines, while the second auction will see 67,200 t of Fe 64%-65.5% ore from its Kirandul mines in Chhattisgarh scheduled to be held on 24 Sep'21.
  
  
• OMDC failed to fetch bids in a tender that was scheduled for sale of 62,450 t of screened and crushed iron ore fines and lumps (in the Fe 58%-65% range) from its Bhadrasahi iron and manganese mines in Odisha's Keonjhar district. The due date of the tender was 14 Sep'21.
  
  
• The Odisha state government has started the second round of mineral block auctions. The companies which have cleared the technical round are Essel Mining, Tata Steel, Electrosteel, AM/NS India, Rungta Mines, MSPL and JSPL for the Kasia iron ore and dolomite block with the highest bid being put at 95.6%.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,100/t DAP Raipur on 17 Sep'21.
  
  
• SteelMint's India pellet export index (Fe 64%, 3% Al, FOB east coast) declined $16/t, w-o-w. It currently stands at $116/t.
  
  
• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) remains stable at $38/t FOB east coast India.
  
  

Coal

• The Australian benchmark premium low-volatile (PLV) hard coking coal (HCC) price continued to surge this week to reach its 10-year high, on active buying in ex-Chinese Asian markets amidst limited spot availability.
  
  
• China's domestic coking coal market witnessed a strong rally as ongoing environmental and safety regulations limited production, while demand remained robust on healthy steel margins.
  
  
• Latest prices for the premium HCC grade are assessed at around $379/tonne (t) FOB Australia, $577/t CNF China and $408/t CNF India.
  
  
• A contract for 75,000 t of PLV HCC was signed on the globalCOAL platform at $380/t FOB Australia for Nov'21 laycan, as against $355/t FOB early this week.
  
  
• South African RB2 portside prices rose by INR 300/t on strong demand, averaging at INR 10,800/t ex-Gangavaram.
  
  
• South African RB1 prices remained largely unchanged at $153/t this week. Discounts for RB2 and RB3 were assessed at $19/t and $34/t respectively.
  
  

Ferrous scrap

India's imported scrap market saw some trade activities this week with some deals concluded. However, not many participants are active at present as they are preferring domestic substitutes over imported scrap.

Recent deals and offers

• Around 1,000 t of UK-origin shredded in containers has been booked at $525/t CFR Nhava Sheva basis. Fresh offers are being quoted at $520-525/t CFR levels.
  
  
• A deal for 2,000 t of West Africa-origin HMS 1&2 (80:20) is heard to have been concluded at around $445/t CFR CNF Mundra. However, many offers are heard at around $450/t CFR levels.
  
  
• Offers for UAE-origin HMS 1 are hovering at $470-475/t and HMS 1&2 (80:20) from the same origin are now cited at $460-465/t CFR levels.
  
  

Ferro alloys

The overall market saw a mixed trend with manganese alloys and ferro chrome prices declining further w-o-w, while ferro silicon prices spiked this week.

• Silico manganese producers are having to reduce prices of silico manganese w-o-w due to lagging demand from the market. According to SteelMint, the current market price of silico manganese is at INR 91,100/t exw-Raipur and INR 90,000/t exw-Durgapur.
  
  
• Ferro manganese prices are hovering at around INR 99,000-100,000/t exw from both Raipur and Durgapur. Limited buying interest from the market kept prices stable.
  
  
• Indian ferro chrome prices increased after a dip in the latter part of last week on optimistic sentiments from the Chinese market. Currently, the prices are at INR 107,000/t, with some producers offering higher levels. There is an increased number of inquiries from China ahead of the week-long holidays in China.
  
  
• Ferro silicon prices spiked this week with a flood of demand in the domestic market. Better export inquiries due to tight supply also supported the producers in raising ferro silicon offers. The current market price of ferro silicon increased by around INR 6,000/t w-o-w to INR 134,200/t exw-Guwahati.
  
  

Semi-finished

The Indian semis market observed fruitful transactions this week, with prices going up, and deals taking place accordingly.

Further, market participants have an optimistic outlook with expectations of improved demand in the coming days. SteelMint observed that producers currently have sufficient orders, especially in metallics (sponge iron and pig iron), and this may keep prices of steel products firm.

During the week, the prices of sponge iron and billet surged by upto 1,200/t and the major hike observed in central, east and southern regions by INR 500-1,200/t, w-o-w.

• This week, very limited bids and offers were reported for the IF-route billet exports due to the recent domestic duties of NPR 2,500/t imposed on billet trades in Nepal. SteelMint's assessment price has been raised by $10/t to $580/t exw-Durgapur, equivalent to $610/t CPT Nepal, via road delivery. The prices surged due to gain in Indian domestic offers.
  
  
• Pig iron prices remained strong in the domestic market due to a slight supply shortage (especially in the eastern region) along with the high coke prices globally. Prices this week rose by INR 1,000-4,500/t and the major hike was recorded in the east region by INR 3,000-4,500/t, followed by INR 1,900/t in north India.
  
  
• SteelMint's benchmark Indian sponge C-DRI (FeM 80%, lumps 100%) export price assessment is stable this week, with over 2,000 t of fresh deals reported at an average price of $455/t CPT Benapole, equivalent to $480-485/t CFR Chittagong.
  
  

Finished longs

Indian finished long steel prices drifted sideways on a weekly basis, specifically in re-bar and structural steel, whereas, wire rod prices remained supported, moving up by INR 200-800/t in the central and eastern regions, as per SteelMint's assessment.

Finished steel transactions have been mostly dull in major supplying regions like central and western India and inventory levels stayed elevated, particularly in rebar. Trade discounts were recorded at around INR 400-500/t as per different locations.

However, the conversion spread is a concern for specific locations and the production level was maintained at 60-70% in major supplying regions.

• Trade reference rebar steel prices via the IF-route for the Fe 500 grade of 10-25 mm was assessed at INR 44,300-44,600/t exw-Raipur, and at INR 45,800-46,200/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 800-1,100/t and trade reference prices of 200-mm angles stood at INR 49,300-49,700/t exw-Raipur.
  
  
• Trade discounts given by Raipur-based wire rod suppliers is about INR 1,000/t and trade reference prices stood at INR 45,000-45,200/t exw-Raipur, at INR 45,300-45,500/t exw-Durgapur, for the 5.5 mm category.
  
  

Finished flats

Domestic flats prices continued to remain under pressure on persistently low demand from both industrial and end-user segments. The dip was evident in cold rolled coil (CRC) prices with the spread coming down further to INR 7,800/t when compared to hot rolled coil (HRC) prices against around INR 9,800/t seen a week ago.

SteelMint's benchmark HRC (IS 2062, 2.5-8 mm) prices continued to hover around INR 65,000-66,000/t exy-Mumbai while that of CRC (IS 513 Gr O, 0.9 mm) has come down by INR 2,000/t to INR 73,000-74,000/t exy-Mumbai against the previous week. Also, the prices for HR-plates (IS 2062, 5-10 mm) remain range-bound at INR 65,500-66,500/t exy-Mumbai. The prices mentioned above are exclusive of GST @ 18%.

• The recent heavy rainfalls in central and northern India have disrupted construction and infrastructure activities. This has also impacted steel demand from allied industry segments like pre-engineered building (PEB) which consume value-added steels like PPGI and PPGL sheets.
  
  
• Segments like automobiles, along with OEMs and farm equipment, are facing major hindrances owing to the chip shortage which is impacting their production. Mahindra & Mahindra, and Maruti Suzuki have already announced 'no production days' in Sept'21 for seven days. This is likely to weigh on the demand for both value-added and substrate flat steel products from this industry.
  
  

However, in order to ease the pressure of slow inventory movement in the domestic market, manufacturers are on the lookout for export opportunities. Towards the end of the previous week, an eastern India-based private steel giant booked about 60,000-65,000 t of HRCs for exports at $890/t CFR to Vietnam for October delivery.