Weekly round-up: Indian steel market sees mixed trends

The semi-finished steel market saw some price fluctuations on the back of moderate demand during week 41 (4-9 Sept'21). Indian semi-finished prices (including that of sponge iron and billets) observed volatility in the range of INR 200-1,700/tonne (t), on a w-o-w basis.

During the week, finished long steel products via the induction furnace route observed limited trade due to higher prices of rebar in the spot market. However, offers increased by INR 500-3,000/t in most markets despite limited demand, whereas, in the central and eastern regions prices declined by up to INR 1,300/t.

On the other hand, the finished-flat steel market witnessed a surge in prices due to demand from the fabrication and heavy engineering segments.

Iron ore and pellets

• SAIL's iron ore auction held on 7 Oct'21 for 96,000 tonnes (t) of fines (Fe 60.5%) from the Barsua mines in Odisha received bids for 8,000 t, offered at around INR 5,200/t (loaded, including royalty, DMF and NMET).
  
  
• At SAIL's iron ore auction held on 7 Oct for 36,000 t of concentrates (Fe 64.69%-65.02%) from the Dalli/Rajhara mines in Chhattisgarh, the total quantity received bids at around INR 5,140-5,560/t (loaded, including royalty, DMF and NMET). However, 8,000 t of tailings (Fe 51.11%) offered at the auction remained unsold.
  
  
• PSU miner NMDC cut iron ore prices by INR 200-400/tonne (t) ($3-5/t) for Oct'21 sales. The price cut in fines is higher than in lumps which may be due to curtailed pellet production for the better part of Sept'21 owing to falling export realisations pressurising domestic offers. The Karnataka government has put three iron ore-bearing mines to e-auction, as per latest reports.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 100/t to INR 13,100/t DAP Raipur on 8 Oct'21.
  
  
• SteelMint's India pellet export index (Fe 64%, 3% Al, FOB east coast) increased by $11/t, w-o-w, to $133/t. Rising global spot iron ore prices have pushed pellet export offers higher.
  
  
• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) increased slightly by $2/t, w-o-w, to $37/t FOB east coast India.
  
  

Coal

• Australian premium low-volatile (PLV) hard coking coal (HCC) prices continued to surge this week, on the back of active trading in ex-China Asian markets amidst tight spot supply.
  
  
• The Chinese market continued witnessing shortages of both imported and domestic coking coal amid ongoing safety and environmental regulations and limited availability of non-Australian premium materials, while demand remained robust on healthy steel margins.
  
  
• Earlier this week, a deal was reported for 75,000 t of Australian premium mid-vol Moranbah North, with a mid-Nov laycan. Around 30,000 t of the cargo was concluded at $395/t FOB, while another 45,000 t was concluded on a floating price based on PLV HCC FOB Australia.
  
  
• Latest prices for the premium HCC grade are assessed at around $396/t FOB Australia, and $605/t CNF China.
  
  
• South African RB2 portside prices surged by INR 4,500/t this week to INR 18,000/t ex-Gangavaram amid strong demand and an acute domestic coal shortage.
  
  
• South African RB1 prices also rose sharply by $16/t w-o-w to $216/t on China's robust demand. Discounts for RB2 and RB3 were assessed at $21/t and $34/t respectively.
  
  

Ferrous scrap

The imported scrap trade into India has slowed down of late after witnessing active transactions over the last two weeks. With domestic scrap, sponge iron and billet prices declining in the second half of the week, imported scrap trade activities also weakened a bit.

• No firm deals for shredded scrap were heard recently. The last deal was concluded at $525/tonne (t) CFR Nhava Sheva earlier this week. Suppliers remained active in other South Asian markets due to higher price acceptability.
  
  
• UAE-origin HMS 1 is being offered at $490/t CFR Nhava Sheva, increasing significantly by around $20/t w-o-w.
  
  
• HMS offers from South Africa and West Africa were heard at around $510/t and $490/t CFR levels, Nhava Sheva.
  
  

Ferro alloys

The overall market saw record high price levels with manganese alloys and ferro silicon prices registering an all-time high, while ferro chrome prices spiked compared to the previous week.

• Indian silico manganese prices touched a record high of INR 124,900/t exw-Raipur and INR 118,500/t exw-Durgapur for the 60-14 grade. This was mainly because of improving inquiries and price parity maintained by the Indian producers.
  
  
• Ferro manganese prices spiked by INR 15,000-17,750/t w-o-w to INR 125,000-130,000/t exw for both Durgapur and Raipur. The Chinese demand from South Korea and Taiwan has got diverted into the Indian market due to low production owing to the dual energy control policy in China, according to sources.
  
  
• SteelMint assessed the current market price of ferro chrome at INR 138,350/t exw-Jajpur. Prices of ferro chrome are still on the higher side owing to limited inventory with producers. Some producers are waiting for the Chinese to returnto the market from the Golden Week holidays.
  
  
• Indian ferro silicon prices witnessed a continuous hike on a daily basis this week. There is good demand in the spot market despite buyers being reluctant to book large quantities due to historic high prices. SteelMint assessed Guwahati producers are offering at INR 257,850/t exw., while Bhutanese offers are lower than the Guwahati offers at INR 228,750/t exw.
  
  

Semi-finished

The semi-finished steel market has observed volatility in prices as demand was moderate during these days which led to price fluctuations in offers floated through the mid-sized mills.

Domestic billet prices fluctuated by INR 500-1,700/t following sponge iron offers which were also volatile by INR 200-1,700/t in a week's trade.

• Tata Metaliks raised pig iron prices by INR 2,000-2,500/t. Offers for foundry grade pig iron are at INR 48,200/t and basic grade stands at INR 46,200/t. Prices are applicable for Kolkata and Howrah.
  
  
• SAIL has floated an export tender for around 16,200 t of prime mild steel non-alloy concast billets from its Durgapur Steel Plant (DSP) in West Bengal. The offer is valid up to 17:00 IST of 14 Oct.
  
  
• SAIL conducted auction for 6,000 t (three rakes) of basic grade pig iron on 6 Oct'21 from Bokaro Steel Plant. The entire quantity was booked at a weighted average price of INR 44,000/t exw.
  
  
• Vedanta Resources raised foundry grade pig iron prices by INR 2,000/t to around INR 49,000-49,200/t delivered to Ahmedabad.
  
  
• SAIL floated an export tender for around 20,000 t of mild steel concast slab from its Rourkela Steel Plant (RSP). The offer is valid up to 17:00 IST of 11 Oct.
  
  

Finished longs

In this week, finished long steel manufactured via the induction furnace route observed limited trade and transactions across the major supplying regions in India. Due to higher prices in rebar, limited demand was reported in the spot market. However, despite limited demand, manufacturers kept prices high as per their previous booking orders and availability of material. Thus, on w-o-w basis, rebar prices increased by INR 500-3,000/t except in central and eastern regions where these declined by up to INR 1,300/t, SteelMint's assessment shows. In the central and eastern regions, weak demand and disparity in prices between traders and plants pressurised sellers to reduce their offers, as SteelMint learned from trade sources.

• The trade reference induction route rebar steel prices for 10-25 mm, Fe 500 grade are assessed at INR 48,200-48,600/t exw-Raipur, and at INR 50,000-50,300/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers are at INR 800-1,100/t and trade reference prices of 200 mm angles stood at INR 54,300-54,700/t exw-Raipur.
  
  
• Trade discounts given by Raipur-based wire rod suppliers were at INR 500-700/t and trade reference prices were at INR 50,800-51,000/t exw-Raipur & INR 49,800-50,000/t exw-Durgapur, for 5.5 mm.
  
  

Finished flats

Market prices for finished-flat steel sawa surge on active restocking by distribution channel partners. Demand also sprouted from the fabrication and heavy engineering segment but was only need-based as per distributors.

SteelMint's benchmark price assessment

• HRC (2.5-8 mm IS 2062) price stands at around INR 67,500-68,000/t (exy-Mumbai), up by INR 2,500/t w-o-w.
  
  
• CRC (IS 513 Gr O, 0.9mm) is being traded at INR 75,000-75,500/t (exy-Mumbai), up INR 2,800/t on the week.
  
  
• HR plates (IS 2062/E250, 5-10mm) stood at INR 68,000-69,000/t exy-Mumbai, increasing by INR 2,900/t w-o-w. Prices mentioned above are exclusive of GST @18%.
  
  

"The trade market prices for hot-rolled coils and plates have come in line with what the mills are offering for Oct'21 dispatches on active restocking. However, the momentum with respect to cold rolled coils was less and the trade prices are still at a discount. The impact of chips shortage might bear on the production volumes of major white goods and automobile giants, but we shall have to wait and watch how the market moves in the coming weeks," trade sources told SteelMint.

The mills might further raise prices in the medium term due to the coking coal price impact on production costs. Meanwhile, the festive season is turning the market for home appliances bullish while automotives might be an added factor.