Weekly round-up: Semi-finished market sees uptrend, flat steel sentiments subdued

The domestic steel market witnessed a slight uptrend during week 25 ( 13 June- 18 June). Semi-finished steel prices surged by INR 300-2,500/tonne (t).

Domestic induction furnace-grade finished long steel offers witnessed an upward trend. Offers rose by up to INR 2,000/t w-o-w. However, the trade reference prices for finished flats (hot rolled coils and cold rolled coils) fell in the range of INR 200-3,000/t.

Iron ore and pellets

• NMDC has scheduled two iron ore auctions from Chhattisgarh. The first auction is for 109,200 t of Fe64%-67% (indicative) grade material from its Bacheli mines, while the second auction will see 67,200 t of Fe64-65.5% (indicative) grade ore from the Kirandul mines going under the hammer.
  
  
• In Vedanta's auction for 140,000 t of iron ore on 16 June from its A. Narrain mines in Karnataka's Chitradurga district, the entire quantity of 40,000 t of lumps (6-40mm, Fe 60-62%) was booked at around INR 3,364-3,514/t (excluding royalty, DMF and NMET) as against the base price of INR 3,314-3,364/t.
  
  
• India's iron ore export market recently started gaining momentum with discussions for some bookings underway. A couple of exporters were heard to be in discussions for deals, although trades are yet to be concluded, sources said. Price indications for Indian-origin Fe57% fines were heard at around $80-90/t CFR China. With the lowering of discounts for low-grade ore, prices have found some support.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 7,650/tonne (t) DAP Raipur on 17 June, down by around INR 250/t compared to the last assessment on 14 June.
  
  

Coal

• In the Australian coking coal market this week, prices rose initially but became stable later on. This weekly rise in prices is attributed to the resurgence in spot demand from Asian countries. Premium HCC prices saw a rise of $10/t w-o-w. The latest price for the same on 17 June was assessed at $378/t FOB Australia and $408/t CNF India.
  
  
• Portside RB2 (5500 NAR) offers fell further this week by INR 1,000/t to INR 18,000/t at Gangavaram Port amid weak buying appetite of sponge iron manufacturers and their increased preference for RB3 (4800 NAR) coal.
  
  
• South African RB1 prices rose by $7/t w-o-w to $322/t FOB as procurement from Europe gained strength as the western world's sanctions on Russia will come into effect from mid-August.
  
  

Ferrous scrap

• Indian buyers were hesitant to buy imported scrap earlier in the week, leaning toward domestic material instead due to the latter's cost-effectiveness. Moreover, suppliers are also resistant to quoting fresh offers at lower levels as there is a huge disparity between bids and offers by around $25/t which kept scrap sellers on the sidelines. Market participants are waiting for further price falls.
  
  
• SteelMint's assessment of Europe-origin shredded scrap prices are at $440/t CFR Nhava Sheva, down by $80/t w-o-w.
  
  
• Dubai-origin HMS 1&2 (80:20) is now offered at $455/t, down by $15-20/t w-o-w.
  
  

Ferro alloys

• Silico manganese (60-14) prices in India were marginally higher amid price corrections, to match the cost of production. SteelMint estimates that on 17 June, silico manganese prices rose across key producing regions. These were up by INR 2,840/t to INR 81,800/t ex- Raipur, by INR 1,700/t to INR 79,680/t ex- Durgapur, and by INR 1,720/t to INR 80,260/t ex-Vizag on a weekly basis.
  
  
• In India, ferro manganese (HC70%) prices rose by around INR 2,000/t in Durgapur and Raipur. Prices were up with marginal fluctuations w-o-w. Market sentiments were driven by the uptrend in silico manganese prices. Prices for ferro manganese on 17 June were at INR 86,300/t ex-Durgapur and INR 87,100/t ex-Raipur.
  
  
• Indian ferro chrome (HC60%) prices dropped by INR 2,450/t w-o-w amidst higher selling pressure and low demand. According to the assessment on 16 June, ferro chrome (HC60%) prices were hovering at around INR 107,000-108,000/t exw-Jajpur
  
  
• Indian ferro silicon (70%) prices surged by INR 8,000/t w-o-w to INR 133,000/t exw- Guwahati amid an increase in inquiries, as assessed on 17 June. A few plants are scheduled for maintenance. Buyers were seeking to secure supplies due to this news. This led producers to increase their prices.
  
  

Semi-finished

Indian semi-finished steel prices increased sharply as per SteelMint's assessment. Billet offers rose in the range of INR 700-2,500/tonne across regions with a major rise of INR 2,300-2,500/t reported in Raipur, Raigarh and Hyderabad regions.

Similarly, sponge iron prices also rose by INR 300-1,700/t on a weekly basis. Offers rose on account of active demand following shortage in ready-to-dispatch billets amidst improved finished steel demand in the spot market.

• SAIL conducted an auction on 17 June for 10,500 t of basic grade pig iron from Bhilai Steel Plant (BSP) and the entire quantity was booked at a weighted average price of INR 43,100/t exw, sources informed SteelMint.
  
  
• Sunflag Iron and Steel Co Ltd conducted an auction for 3,000 t (200×15 lots) of steel grade pig iron on 10 June, in which buyers booked only 800 t (200×4 lots) at a weighted average price of INR 43,000/t exw.
  
  
• SAIL held an auction for 3,000 t of basic pig iron (in 30 units) on 16 June from the Rourkela Steel Plant (RSP). Buyers booked the entire quantity at a weighted average price of INR 43,400/t exw.
  
  
• About 12,000-13,000 t of sponge iron export deals were reported this week at a price range of $400-410/t exw-eastern India, equivalent to $420-430/t CPT Nepal for FeM 79-80% material (70% lump and 30% fines).
  
  
• Also, around 10,000 t of sponge iron deals were reported this week to Bangladesh at $380-383/t CPT Benapole basis.
  
  
• About 5,000 t of IF-route billet deals were reported at around $570-580/t exw Durgapur, equivalent to $595-605/t CPT Nepal.
  
  
• Spot steel grade pig iron prices fell by INR 500/t in the northern region. These were firm in the eastern region and rose by INR 300-900/t in central India due to the price recovery in sponge iron and billets w-o-w.
  
  

Finished long

India's IF-grade finished long steel market witnessed active buying enquiries and trades this week. Traders and buyers are actively procuring material although the quantity varied from region to region. With active demand in finished steel, raw material prices in most of the key markets are also on higher side which supported market sentiments.

It is also observed that due to lack of trade in the past few weeks, some manufacturers adjusted their production level this week which created short supply specifically in the central, southern and western regions. This factor also supported the price increase in the spot market. However, in some markets, manufacturers preferred to kept offers stable throughout the week and adjusted the tradable prices as per the movement of billet prices, SteelMint learned.

• On a weekly basis, prices of rebar surged by up to INR 2,000/t w-o-w in most markets except in Mumbai (western region) where these fell by INR 800/t, as SteelMint's assessment shows.
  
  
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at 51,200-51,600 INR /t exw Raipur, INR 53,500-53,400/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at around INR 1,200/t and trade reference prices of 200 mm angles stood at INR 56,000-56,500/t exw Raipur.
  
  
• Trade discounts given by Raipur-based wire rod suppliers were at INR 400-700/t and trade reference prices stood at INR 51,700-52,200/t exw Raipur, and at INR 50,800-51,000/t exw Durgapur, for 5.5 mm.
  
  

Finished flat

• Impacted by the low buying interest, domestic trade market prices of flat steel continued to decline. Higher inflation, continual decline in prices in both overseas and domestic markets have kept buyers procuring at reduced volumes.
  
  
• "Buyers remain concerned that prices will continue to decline, hence rather than buying in volumes they are spreading their purchases over week(s). This has increased bargaining on the table and is weighing on the offers from the sellers in the trade market," shared a major distributor from western India.
  
  
• However, with the depletion in inventory in February-March, steel producers are reporting slight increase in inquiries from industrial buyers as well as distributors. Moreover, limited replenishment in April and May has led to inventories building up in the trade segment.
  
  
• On the exports front, Indian steel majors continue to find it difficult to conclude deals for boron-added HRCs. Last week a parcel of 15,000t of alloyed HRC (SAE1006) was booked for Vietnam at $740-745/t CFR to be delivered in July. However, mills have been unable to sign deals in the Middle East and the European markets at present.
  
  
• SteelMint's India HRC (SAE1006) export index was assessed lower at $723/t FOB east coast India, compared to $730/t FOB a week ago.