Weekly round-up: Indian steel market sees supportive trend

The semi-finished steel market registered a sharp surge in prices due to supply shortage and improve demand during the week 42 (11-16 Sept'21). Domestic billet prices rose by INR 1,700-3,500/t & sponge iron prices gained by INR 1,400-2,300/t in a week's trade.

India's finished long steel via induction furnace route in this week observed a mixed trend. However, rebar prices gaind by up to INR 4,200/t. In addition, finished flat steel market noticed a supported trend and hot rolled coil prices increased by INR 3,100/t.

Iron ore and pellets

• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) increased slightly by $2/tonne (t), w-o-w, to $39/t FOB east coast India. "Indian iron ore fines Fe 57% export price indications should be around $65-70/t, CFR China. However, bids are heard at around $60/t but the level is not viable," told a trader. Trade sources said there is very limited buying interest for low grade ore currently.
  
  
• SteelMint's India pellet export index (Fe 64%, 3% Al, FOB east coast) increased by $17/t, w-o-w, to $150/t. Rise in global iron ore prices after resumption of trade post-the China's Golden Week holidays pushed up prices. KIOCL had issued an export tender for Fe 63% (2% Al) pellets which was due on 12 Oct'21. The tender was for KIOCL's empanelled customers. The minimum quantity offered was 55,000 t. As per market sources report to SteelMint, the tender was concluded at $165/t FOB. However, the destination could not be confirmed.
  
  
• NMDC's Donimalai mines had conducted an iron ore e-auction on 8 Oct'21 at which 488,000 t was booked out of the total quantity of 600,000 t put to auction. JSW emerged as the largest buyer at 324,000 t followed by Rashtriya Ispat Nigam Limited Visakhapatnam Steel Plant at 80,000 t.
  
  

Coal

• Australian premium low-volatile (PLV) hard coking coal (HCC) prices remained mostly steady this week.
  
  
• However, prices of the weaker coal grades such as PCI and semi-soft increased due to supply tightness caused by the strong thermal coal market in China.
  
  
• In the Chinese coking coal market, supply tightness and winter restocking demand continued to provide support to rising CNF China prices.
  
  
• Latest prices for the premium HCC grade are assessed at around $399/t FOB Australia, $613.50/t CNF China and $430.90/t CNF India.
  
  
• South African RB2 portside prices rose by INR 500/t this week to INR 18,500/t ex-Gangavaram amid the persisting domestic coal shortage.
  
  
• South African RB1 prices rose also sharply by $15/t w-o-w to $231/t on robust demand in China. Discounts for RB2 and RB3 were assessed at $22/t and $36/t respectively.
  
  

Ferrous scrap

Imported scrap offers into India continued to rise on bullish sentiments due to good demand and rising scrap prices in Turkey. Sponge iron prices increased on the back of steeply rising coal prices, but steelmakers remained active in restocking scrap from the overseas markets, sources told SteelMint.

• Shredded from the UK/EU was being offered at $545-550/t CFR Nhava Sheva levels, up considerably by $10-20/t w-o-w. However, the market didn't show any interest in booking any container at these levels.
  
  
• Dubai-origin HMS 1&2 (80:20) was available at $490-500/t. Some deals were concluded at these levels. A deal for HMS 1&2 (80:20) from West Africa was concluded at $500/t CFR basis.
  
  

Ferro alloys

• Indian silico manganese prices increased in the later last week after steel prices rebounded. Most of the Durgapur-based mills were reluctant on booking material on holidays, while Raipur-based producers were offering at much higher levels. Prices closed at INR 132,000/t ex-Raipur and INR 125,000/t ex-Durgapur.
  
  
• Indian ferro manganese prices increased following hike in silico manganese prices. Meanwhile, exports demand for ferro manganese HC 75% improved. Most producers of ferro manganese were booked and had limited material to offer in the spot market which encouraged producers to increase prices. Currently, prices are at INR 135,000-136,500/t both in Raipur and Durgapur exw.
  
  
• Indian ferro chrome market remained perplexed on Tsingshan's price revision this month, which is RMB 1,000/t down than the Chinese spot market. Buyers were insisting on lower prices on account of rolled over prices by Tsingshan, but producers stayed firm at current prices. However, the dull sentiments from the Chinese market affected the Indian market, dragging prices down by INR 3,350 w-o-w to INR 135,000/t ex-Jajpur.
  
  
• Indian ferro silicon prices increased further on supply worries. Supply remained constricted as most producers remained overbooked and demand from low-mid level traders remained low on higher commodity prices. Currently, Guwahati prices are at around INR 260,000/t exw, with some producers even offering at higher prices.
  
  

Semi finished

The semi-finished steel market saw a sharp rise in prices on account of supply shortage and improved demand. A few steel mills in the northern region reported power crisis, following which prices across regions gained.

• Domestic billet prices rose by INR 1,700-3,500/t while sponge iron prices gained by INR 1,400-2,300/t w-o-w.
  
  
• Indian sponge iron export offers increased to around $510-515/t CPT Benapole, equivalent to $540-545/t CFR Chittagong, Bangladesh.
  
  
• Indian pig iron prices increased by INR 500-1,500/t with a major hike of INR 1,000-1,500/t seen in central and northern regions followed by INR 500-700/t in eastern India. Pig iron producers raised offers amidst rising steel and coal prices.
  
  
• Vizag Steel conducted an auction for 2,300 t of basic grade pig iron on 9 Oct'21. The entire quantity was booked at INR 45,050/t exw.
  
  
• SAIL floated an export tender for around 20,000 t of prime mild steel non-alloy concast billets from its IISCO Steel Plant (ISP) in Burnpur, West Bengal. The offer must be valid up to 17:00 IST on 18 Oct.
  
  
• Vizag Steel issued a sale tender for export of 2,709 t billets, blooms and wire rod coils to Nepal. The due date of submission of bids is 18 Oct'21.
  
  
• A western India-based major pig iron producer concluded a tender for one rake of basic grade material on 13 Oct'21 at around INR 41,500/t ex-plant, equivalent to INR 45,000/t FOR Phillaur siding in Ludhiana (Punjab), sources reported.
  
  

Finish long steel

India's finished long steel manufactured via induction furnace route saw a mixed trend in terms of demand and buying inquiries across major supplying regions of the country. However, higher raw material prices prompted manufacturers to keep prices high as per their previous booking orders and availability of material at mills. On a w-o-w basis, rebar steel prices increased by up to INR 4,200/t, SteelMint assessment shows.

• The trade reference induction route rebar steel prices of 10-25 mm size Fe 500 grade are assessed at INR 52,300-52,600/t exw Raipur and INR 53,500-53,900/t exw Jalna.
  
  
• Trade discount given by Raipur based heavy structural steel manufacturers was around INR 1,000/t. Trade reference prices of 200 mm angle stood at INR 57,000-57,400/t exw Raipur.
  
  
• Trade discounts given by Raipur based wire rod suppliers were at INR 800-1,000/t and trade reference prices at INR 54,000-54,200/t exw Raipur & INR 52,800-53,000/t exw Durgapur, for size 5.5 mm.
  
  

Finished flats

An increase in restocking activities in anticipation of a second price hike announcement by major private steel producers provided further thrust to trade reference prices in the first two weeks of the month. With this, in Oct'21, the domestic trade reference prices surpassed the previous high level of INR 67,500/t exy-Mumbai in the beginning of June'21.

• SteelMint's benchmark price assessment for 2.5-8 mm IS 2062 HRC stood at around INR 70,500-71,000/t (exy-Mumbai), up by INR 3,100/t against INR 67,500-68,000/t (exy-Mumbai) a week back.
  
  

"It is likely that we will see few more hikes in the upcoming weeks considering the thrust in production costs over significant rise in coking coal prices, and mills' determination to disseminate the impact into the trade segment. At present, we expect an increase of INR 1,000-1,500/t from major private mills after the PSU steel major announced its second hike of INR 750/t earlier this week," said a major distributor from western India.

• Along with this, SteelMint's India HRC index also increased by $2/t to $873/t FOB east coast, which had increased by $6/t a week back to $871/t FOB basis.
  
  
• A couple of Indian mills have collectively booked around 8-9 rakes of HRCs to Nepal for Dec'21 deliveries. The deal was closed at $840/t ex-mill ($860/t CFR Raxual border).
  
  

Current offer in export destinations-

• Nepal: Current offers stand in the range of $860-865/t CFR Raxual border.
  
  
• Vietnam: Mills are quoting $910-920/t CFR Vietnam. Bids are at around $865/t CFR from Vietnamese importers.
  
  
• The UAE: Mills are quoting around $910-920/t CFR levels, and awaiting firm bids from the UAE-based importers.