Weekly round up: Indian steel market remains upbeat as prices stay firm - 12 Mar'22

The domestic steel market remained strong during week 11 (7 -12 Mar'22). Semi-finished steel prices increased in the range of INR 300-4,000/tonne (t).

Domestic induction furnace finished long steel offers surged in the range of INR 500-6,500/t w-o-w. The trade reference prices for finished flat steel shoot up to INR 8,000/t for HRCs and CRCs.

Iron ore and pellets

• State PSU miner OMC has scheduled an iron ore auction for 15 Mar'22. Around 792,000 t of lump ore and 1,047,000 t of fines will be put up for auction. The base price of the auction is yet to be disclosed. In the previous auction, the miner received active response, with 1.09 mnt (98%) booked out of the total offerred quantity of 1.109 mnt.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 14,200/tonne (t) DAP Raipur on 11 Mar'22, down around INR 200/t against the last assessment on 8 March. No deal was heard in this publishing window.
  
  
• SteelMint's weekly index for India's low-grade iron ore fines (Fe 57%) exports stood at $46/t FOB east coast, rising by $4/t w-o-w. The market has remained largely quiet amid subdued Chinese buying interest. The demand for low-grade ore continues to remain weak in China.
  
  
• The Indian pellet export market has seen a significant shift in recent times after global trade tensions erupted following the Russia-Ukraine war. However, the market is currently silent in China with no firm bids or deals heard. However, price indications are at $165-170/t FOB levels. However, with better price realisations in Europe, Indian players are not actively chasing Chinese markets currently.
  
  
• SteelMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) stands at $172/t, up by $16.5/t w-o-w.
  
  

Coal

• Australian premium low-volatile hard coking coal prices surged by $100/t this week amid ongoing Russia-Ukraine conflict and increased demand for Australian coal from European mills.
  
  
• Latest prices for the premium HCC grade are assessed at around $660/tonne (t) FOB Australia and $682/t CNF India.
  
  
• Few portside RB2 (5500 NAR) trades were heard at INR 24,500/t as the buying interest continues to remain tepid. While offers for INR 26,000/t were not accepted by the buyers.
  
  
• South African RB1 prices for Mar'22 saw a correction of $55/t wow and stood at $375/t, FoB basis amid EU's decision to not impose sanctions on Russian gas supplies, resulting in reduced panic buying by European utilities for coal.
  
  

Ferrous scrap

Indian imported scrap market witnessed a slow down in trade later this week after remaining active in the last couple of weeks. As the global market has been impacted due to supply chain constraints caused by the Russia-Ukraine war, imported scrap offers have continued to rally. However, with a slowdown in semi-finished and finished steel trade towards the end of the week, imported scrap inquiries turned limited.

• The yards are holding back and waiting for a clear market direction. On the other hand, steel mills prefer to book imported material, mostly from Africa, as its prices are on par with domestic scrap prices, SteelMint learnt.
  
  
• Fresh offers for imported shredded from UK/EU-origin are being quoted at $635-640/t CFR levels, hitting a new-high with a considerable rise of $30-40/t w-o-w. Meanwhile, buyers are bidding lower by $10-15/t.
  
  
• Fresh offers for Dubai-origin HMS 1 & 2 (80:20) in containers are at $600/t CFR Nhava Sheva, witnessing a hike of around $50/t w-o-w.
  
  

Ferro alloys

The overall ferro alloys market saw an uptrend w-o-w with all the bulk ferro alloys (manganese alloys, ferro chrome, and ferro silicon) prices climbed as Global financial tensions provided good business for Indian smelters with ample export inquiries.

• Silico manganese (60-14) prices climbed up to INR 2,800/t w-o-w due to improved demand and panic buying. Many buyers started booking the material in a fear of further hike. According to assessment on 11 Mar'22, Silico manganese prices were hovering at around INR 123,000-126,000/t exw- from both Durgapur and Raipur.
  
  
• Ferro manganese (HC70%) prices inched up w-o-w due to limited supply as most of the producers shifted their production to silico manganese due to rising prices. Durgapur producers were offering at around INR 116,000/t exw while prices from Raipur were hovering at around INR 118,000/t exw, assessed on 11 March.
  
  
• Indian ferro chrome (HC60%) prices surged amid reduced supply and increasing export demand as the Russia-Ukraine war increased demand for ferro chrome mainly from Europe and Japan, which boosted prices. According to SteelMint's assessment on 9 Mar'22, Ferro chrome prices were at around INR 125,000/t ex-Jajpur.
  
  
• Ferro silicon (70%) prices climbed at around INR 197,000/t exw from Bhutan and Guwahati. As a result of these ongoing political tensions, western sanctions on Russia have already changed global Ferro silicon transactions, and India was reporting price increase.
  
  

Semi finished

On a weekly basis, domestic sponge offers increase sharply by INR 400-2,500/t across regions & the major rise in prices reported in north India (Mandi Gobindgarh) by INR 2,500/t. Similarly, billet prices also inclined by INR 300-4,000/t on weekly basis except in Mumbai & Ahmedabad west India, were prices decline by INR 400-600/t w-o-w.

• Vizag Steel has floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP grade) on FOB ST delivery basis. The due date for the tender is 15 Mar'22.
  
  
• SAIL held an auction for 4,800 t of basic grade pig iron on 8 Mar'22 from the Rourkela Steel Plant & the buyers booked the entire quantity at INR 54,550-56,000/t.
  
  
• Tata Metaliks has increased pig iron prices by INR 5,100/t ($67/t). Fresh offers for foundry grade material are at INR 62,800/t and basic grade at INR 60,300/t. Prices are exw Kharagpur, applicable for the Kolkata and Howrah markets.
  
  
• Vedanta Resources has raised foundry grade pig iron prices by INR 3,000/t ($39/t) to around INR 61,500/t DAP Ahmedabad.
  
  
• Vizag Steel, conducted an auction on 8 Mar'22 for 1,200 t of basic grade pig iron & the buyers booked the entire quantity at INR 54,400/t exw.
  
  
• Indian sponge iron export offers to Nepal increased to around $570-575/t (loaded on to rake), equivalent to $595-600/t CPT Nepal, (70% lumps and 30% fines, FeM 80%).
  
  
• IF-route billets export offers rose to around $755/t exw-Durgapur, equivalent to $780/t CPT Nepal. Meanwhile, deals were reported for two-three rakes in the beginning of the week for the BF-route billets at around $785-790/t CPT Nepal.
  
  
• Indian spot steel grade pig iron prices increased this week by INR 3,000-3,500/t following increasing coal, coke and steel prices.
  
  

Finished longs

India's finished long steel manufacturers via induction furnace route observed weak buying enquiries and limited trades in this week. Despite this most of the manufacturers of rebar steel in various markets try to keep offers high in the spot market owing to adequate future booking orders in hand which supports them to keep offers high and marginal changes in trade prices as per the availability of material and movement of steel billet prices. On a weekly basis, prices in rebar steel remained high and surged by INR 500-6,500/t w-o-w, SteelMint assessment shows.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 64,800-65,200/t exw Raipur, INR 71,300-71,700/t exw Jalna.
  
  
• Trade discount given by Raipur- based heavy structural steel manufacturers is around INR 1,000/t and trade reference price of 200 mm angles stood at INR 68,000-68,500/t exw Raipur.
  
  
• Trade discounts given by Raipur- based wire rod suppliers are hovering over INR 2,500/t and trade reference prices stood at INR 61,500-61,900/t exw Raipur, INR 63,800-64,000/t exw Durgapur, size 5.5 mm.
  
  

Finished flats

• SteelMint's weekly trade market prices of HRC and CRC increased by up to INR 7000-8000/t ($91-104/t) in various market following second round of hike announced by mills. AM/NS India implemented a hike of around INR 4,500/t ($59/t) across its flat steel product category, including galvanised steel coils, while, SAIL took a total hike of INR 6,000/t ($79/t) since the beginning of March.
  
  
• Moreover, Indian mills are actively booking HRCs for export to Europe on better realisations. Offers for HRCs increased to around $1,250/t CFR Europe by the middle of current week.
  
  
• Furthermore rallying prices of steel making raw materials along with those of coating materials have been the primary drivers of the price hikes this month.