Weekly round-up: Indian steel market remains weak

The Indian steel market remained weak on account of poor demand during week 49 (29 Nov'21 to 4 Dec'21). Indian semi-finished steel prices plunged by INR 400-1,900/t across regions.

The re-bar market observed weak trade enquiries and limited transactions across the major supplying regions. Also, prices decreased by INR 200-1,700/t w-o-w.

Moreover, domestic finished flat steel prices dropped further during the week due to limited trade activities. Also, the price cut announcement from primary players forced sellers to reduce their offers.

Iron ore and pellets

• SAIL conducted an auction for 80,000 t of iron ore tailings (Fe 59.8%-indicative) from the Barsua iron ore mines in Odisha. The due date for submission of bids was 3 Dec'21, with the base price set at INR 3,500/t FOR (ex-mines, including royalty, taxes, and additional premium). According to updates received, the tender failed to fetch any response due to bid-offer disparities.
  
  
• OMC had scheduled an e-auction for iron ore fines and lumps on 3 Dec'21. Out of the total 800,000 t of lumps put to auction, only 52% (417,000 t) received bids. The majority of the lots received flat bids, i.e., in line with the base price except those of Guali and Jiling which registered hike in bids by up to INR 2,100/t. Out of the total 1.18 mn t of iron ore fines put to auction, only 15% (166,000 t) received bids. The auction received flat bids, in line with the base price.
  
  
• The Odisha government has allowed the sale of 50% of minerals from the captive mining lease of Prakash Industries under the Mineral Concession Amendment Rules, 2021, SteelMint learnt from government sources.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell further to INR 9,500/tonne (t) DAP Raipur on 3 Dec'21, lower by INR 150/t against the last assessment of INR 9,650/t on 30 Nov'21.
  
  
• Steelmint's India pellet export index (Fe 64%, 3% Al, FOB east coast) remained range-bound for the week at $127/t.
  
  
• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) stood at $29/t FOB east coast India, lower by $3/t w-o-w.
  
  

Coal

• Australian premium low-volatile (PLV) hard coking coal (HCC) prices increased marginally this week, amid moderate buying interest and weather-related persistent supply concerns in Australia.
  
  
• Trading activity remained thin as most end-users stayed on the sidelines, showing no urgency to transact in the short term due to the recent volatility.
  
  
• Meanwhile, potential supply concerns prevail amongst market participants over predictions of heavy rainfall in Australia's key production hub of Queensland.
  
  
• Latest prices for the premium HCC grade are assessed at around $317.50/tonne (t) FOB Australia, $358/t CNF China and $341.90/t CNF India.
  
  
• South African RB2 portside prices fell by INR 2,100/t to INR 10,200/t amid fall in imported prices.
  
  
• South African RB1 prices fell by $17/t to $133/t amid rising Omicron cases, raising concerns of a potential lockdown. Discounts for RB2 and RB3 were assessed at $14/t and $26/t respectively.
  
  

Ferrous scrap

• India's imported scrap offers have remained largely unchanged against last week, despite drop in bids. Deals for smaller lots of shredded in containers from USA were heard at $545/t CFR NHSV basis. Fresh offers for UK-origin shredded scrap are being quoted at $550-555/t CFR Nhava Sheva, largely stable w-o-w. However, no major deals were heard in the last couple of weeks.
  
  
• Simultaneously, most of the buyers and furnaces feel local scrap prices are more feasible than imported. SteelMint's assessment for HMS (80:20) was recorded at INR 35,700/t ($475/t) DAP Mumbai, a decline of INR 200/t ($3/t), while prices for Jalna were at INR 35,500/t DAP ($473/t), down by INR 400/t ($5/t) w-o-w.
  
  
• On the other hand, price indications for Dubai-origin HMS 1&2 (80:20) stand at around $475-480/t, CFR Nhava Sheva. Whereas, landed cost of the imported scrap to Mumbai comes to around INR 38,000/t. Thus, imported scrap is costlier by around INR 2,000/t over domestic.
  
  

Ferro alloys

India's ferro alloy prices are under pressure as a result of limited demand and the downtrend in steel prices. Manganese alloys and ferro chrome prices are declining, while ferro silicon prices are rising to meet Bhutan's offer.

• Silico manganese prices have dropped this week owing to a lack of buying from both the domestic and export markets. According to SteelMint's assessment on 3 Dec'21, prices for 60-14 grades are hovering at around INR 92,125-95,000/t exw- from both Durgapur and Raipur. Export prices for 65-16 grades are at $ 1,465/t FOB India.
  
  
• As per SteelMint's assessement on 4 Dec'21, ferro manganese (HC70%) prices are hovering at around INR 101,800-102,000/t exw- from both Durgapur and Raipur. Limited demand forced producers to reduce their offers w-o-w.
  
  
• Ferro chrome (HC60%) prices have shrunk owing to limited demand from China. The current market price is reduced by INR 5,725/t w-o-w to INR 110,000/t exw-Jajpur, assessed on 1 Dec'21.
  
  
• Indian producers increased ferro silicon (70%) offers as against the response to Bhutan's market acceptance of INR 200,000/t in last week's trade for the 70% grade. Currently, producers are offering at INR 200,000/t exw-from both Guwahati and Bhutan.
  
  

Semi-finished

Indian semi finished steel prices decrease sharply as per SteelMint assessment, the domestic billet prices fell by INR 400-1,200/t across regions with a major fall seen in Raipur and Hyderabad. Similarly, low demand and falling billets prices weighed on sponge iron offers, as prices declined by INR 500-1,900/t.

• SAIL floated an export tender for 18,900 t of prime mild steel non-alloy concast billets from its IISCO Steel Plant in Burnpur, West Bengal. The offer is valid till 6 Dec'21.
  
  
• Vizag Steel conducted a pooled iron auction on 2 Dec'21 and the entire quantity of 2,700 t got booked at INR 35,000/t exw. The plant also 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 7 Dec'21.
  
  
• SAIL held an auction for 1,500 t of steel grade pig iron (by road) on 1 Dec'21 from its IISCO steel plant in West Bengal and the entire quantity was booked at a weighted average price of INR 36,200/t exw.
  
  
• SAIL held an auction for 4,800 t of basic grade pig iron on 3 Dec'21 from the Rourkela Steel Plant and around 43% of the total material was booked at a weighted average price of INR 36,450/t exw.
  
  
• IF-route billet export offers fell by $15/t, w-o-w, to around $535/t exw-Durgapur, equivalent to $560/t, CPT Nepal, via road delivery. Demand remains weak, as per trade sources.
  
  
• Export prices of sponge iron (FeM 80%, lumps 100%) fell by $5/t to $435/t CPT Benapole, equivalent to $465/t CFR Chittagong. About 5,000 t of deals were confirmed this week.
  
  
• SteelMint's price assessment for steel grade pig iron plunged by INR 700-2,000/t, w-o-w, and the sharpest fall was recorded in eastern India, by INR 2,000/t, followed by INR 700-1,400/t in the central, southern, and northern regions.
  
  

Finished longs

India's finished long steel manufactured via the induction furnace route, in this week, observed weak trade enquiries and limited transactions in the spot market across the major supplying regions. Prices in rebar steel decreased by INR 200-1,700/t w-o-w, SteelMint's assessment shows. The sharp fall in raw material prices in key markets made finished steel trades cautious this week. Dull buying enquiries and lack of future bookings pressurised the manufacturers to reduce prices as per market requirements and movement of raw material prices, sources shared.

• The trade reference price of Fe 500 grade rebar steel manufactured via the IF-route for 10-25 mm size was assessed at INR 43,900-44,200/t exw-Raipur, and at INR 46,800-47,200/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers are in the range of INR 1,900-2,200/t and trade reference prices of 200-mm angles stood at INR 49,400-49,700/t exw-Raipur.
  
  
• Trade discounts given by Raipur-based wire rod suppliers are at around INR 2,000/t and trade reference prices stood at INR 43,300-43,600/t exw-Raipur, at INR 44,300-44,500/t exw-Durgapur, for 5.5 mm.
  
  

Finished flats

• Domestic market prices fell across the flat steel product category this week. The downward momentum came on the back of limited trading activities during the week as both buyers and sellers stood on the sidelines in expectation of a price revision announcement by major steel producers for Dec'21 deliveries.
  
  
• Private steel major JSW Steel Ltd was the first to announce a cut of around INR 2,000- 2,500/t ($27-33/t) in its list prices for HRCs (IS 2062, 2.5-8mm) which now stand at INR 67,500-68,000/t ($896-903/t), while CRCs are now at INR 74,500-75,000/t ($989-996/t) with effect from 2 Dec'21. The prices are on an exy-Mumbai basis, and exclusive of GST @ 18%. Other steel majors followed with similar price cut ranges.
  
  
• Meanwhile, global HRC prices have been on a consistent decline for over a month now, and this factors is impacting sentiments in the domestic market, among others. SteelMint's India HRC (SAE 1006) export index has fallen by $77/t in the past four weeks to $800/t FOB east coast. Limited buying interest in Vietnam amid competitive offers from China, and holidays in the UAE - on account of Commemoration and National Day celebrations - have weighed on both overseas trade activities and export offers this week.
  
  
• Furthermore, the Chinese HRC (SS400) export offers have shown a sharp descent of about $210/t in the past seven weeks to around $775/t FOB.