Weekly round-up: Semi-finished prices continue to fall on bearish market sentiments

The domestic steel market witnessed a negative trend in prices during week 29 (15 July-20 July, 2024). Semi-finished steel prices fell in the range of INR 50-400/tonne (t).

Iron ore and pellets

• BigMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, dropped by INR 100/t w-o-w to INR 9,050/t DAP Raipur on 19 July. Limited pellet deals were concluded in the Raipur region. Buyers remained cautious about pellet purchases and opted for a wait-and-watch mode ahead of OMC's iron ore auction on 20 July.
  
  
• Odisha Mining Corporation (OMC) has scheduled an auction for around 2.54 million tonnes (mnt) of iron ore (1.06 mnt of lumps and 1.49 mnt of fines) on 20 July. The company has reduced base prices m-o-m by INR 150-250/t in lumps and by INR 700-800/t for majority of the fines lots. The continuous drop in pellets, sponge and steel prices had forced miners to decrease the base prices for the upcoming auction.
  
  
• BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) decreased by $5/t w-o-w to $97/t on 17 July 2024. No major trades were witnessed in this trading week as sellers kept their offers on hold following the price fluctuation in the seaborne market. BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $59/t FOB east coast on 18 July 2024.
  
  
• Asia-Pacific Supramax dry bulk (50,000-55,000 t) freight rates for an iron ore vessel from the east coast of India to China fell by $0.1/t this week to $13.4/t on 17 July. Market sentiments in China remained sluggish due to the ongoing Third Plenary Session of the Chinese Communist Party from 15-18 July. Additionally, fall in bunker prices and lower cargo availability have pressured freight rates in global markets.
  
  

Coal

• Australian premium hard coking coal prices fell by 7% w-o-w to $230/t FOB and $246.55/ t CNF on 19 July. Prices fell on slow demand, with traders facing increasing pressure to lower their offers amidst oversupply.
  
  
• RB1 (6000 NAR) grade coal prices were up by $2/t w-o-w at $106/t FOB. Also, RB3 prices picked up by $2/t to $73/t FOB Richards Bay, South Africa.
  
  
• Portside prices of South African RB3 (4800 NAR) thermal coal at Vizag Port fell by INR 350/t to INR 7,750/t.
  
  

Ferrous scrap

• This week, India's imported scrap market remained sluggish as buyers continued to show disinterest due to significant bid-offer disparities. Indicative offers for shredded scrap hovered at around $410-415/t CFR, but buyers were bidding lower at $400-405/t CFR, creating a $10-15/t gap that deterred suppliers too from offering in the market. Offers for HMS (80:20) from the UK/Europe and West Africa were at $385-395/t CFR.
  
  
• Domestic market conditions also impacted demand, with rebar prices dropping to four-month lows, prompting buyers to adopt a need-based purchasing approach. Overall, trading activity was minimal as market participants avoided bulk procurement amidst ongoing price volatility.
  
  
• Around 2,000 t of HMS (80:20), HMS-LMS bundle mix and HMS-PNS mix scraps were booked from African, Yemen and UAE origins at around $380-390/t CFR Mundra.
  
  

Ferro alloys

• Silico manganese: Silico manganese prices in India dropped w-o-w by INR 1,500/t ($18/t) to INR 68,600-69,400/t ($819-829/t) exw across markets (Raipur, Durgapur and Vishakhapatnam). A persistent lack of buying activity from domestic steel mills has been a primary driver of the price decline.
  
  
• Ferro manganese: Ferro manganese (HC70%) prices decreased sharply w-o-w by INR 2,300/t ($27/t) in Raipur to INR 77,700/t ($928/t) exw. Meanwhile, in Durgapur, prices dropped by INR 2,300/t ($27/t) w-o-w to INR 77,000/t ($920/t). Prices continued to stay on the lower side due to resistance to higher offers and subdued demand.
  
  
• Ferro silicon: Indian ferro silicon (FeSi:70%) prices fell w-o-w by INR 500/t ($6/t) to settle at INR 92,000/t ($1,99/t) exw-Guwahati on 19 July. Meanwhile, Bhutan's prices fell by INR 500/t ($6/t), reaching INR 93,100/t ($1,121/t) exw. Prices declined as deals were concluded at lower rates, and buyers resisted higher offers.
  
  
• Ferro chrome: Prices of Indian high-carbon ferro chrome (HC60%, Si:4%) declined by INR 1,150/t ($14/t) on 19 July, settling at INR 108,600/t ($1,298/t) exw-Jajpur. Prices decreased as resistance towards higher offers persisted in the market. Further clarity on prices would be there post-OMC's auction of 65,700 t of chrome ore on 20 July with a slight base price reduction of INR 35-892/t m-o-m across grades.
  
  

Semi-finished

• Indian semi-finished steel prices decreased as per BigMint's assessment. Domestic billet prices in almost all key locations decreased by INR 50-400/t, with a major decrease of INR 400/t seen in the Rourkela, Ahmedabad, and Mumbai markets. However, billet prices in Ramgarh and Goa increased slightly by INR 100-350/t. Similarly, sponge iron prices also decreased in almost all key locations by INR 50-250/t, with a major decrease of INR 250/t seen in the Bellary market. However, sponge prices in the Raigarh and Ramgarh markets were up by INR 200-900/t.
  
  
• NMDC's steel plant in Nagarnar, Chhattisgarh, conducted a steel-grade pig iron auction for a total of 40,000 t on 18 July. Out of total quantity, 30,000 t were booked at an average price of INR 36,500/t.
  
  
• SAIL-Rourkela Steel Plant (RSP) held an auction for 2,000 t of steel-grade pig iron on 16 July. The total quantity was booked at an average price of INR 38,200/t exw.
  
  
• Indian DRI export offers increased by approximately $8-10/t to $455/t on CPT Raxaul basis, and $365/t, CPT Benapole.
  
  

Finished long steel

• IF rebar: India's induction furnace route finished long steel market remained subdued, while prices declined further w-o-w. Trading activities are still dull as buyers choose to stay on the sidelines owing to market uncertainty. Higher bid-offer disparities forced suppliers to offer attractive trade discounts to liquidate material amid rising inventory levels. However, buyers remained cautious on bulk procurement. A similar trend in sponge iron and billets further led to the current scenario. As per sources, there is hardly much demand. Prices are already at the bottom, squeezing margins. These factors are likely to create price volatility in the near term.
  
  
• On a weekly basis, in rebar, prices witnessed a declined by up to INR 600/t across regions, as per BigMint assessment.
  
  
• The trade reference price of 10-25 mm, Fe 500 grade rebar manufactured via the IF route was assessed at INR 41,700-42,100/t exw Raipur, and at INR 45,900-46,500/t exw Jalna.
  
  
• Trade reference price of heavy structural steel for base size 150mm channel stands at INR 45,200-45,500/t exw Raipur.
  
  
• Trade reference prices of wire rods are hovering at INR 43,000-43,500/t ex Raipur.
  
  
• BF-rebar: Trade-level blast furnace (BF) rebar prices fell w-o-w due to sluggish demand across markets. Prices are currently hovering at a 4-month low as similar levels were last seen in end-March 2024. Market participants in the distribution network have adopted a destocking mode to liquidate their inventories.
  
  
• The current week's rebar prices (12-32mm) in the trade segment dropped by INR 2,000/t w-o-w to INR 52,300/t exy-Mumbai. Prices are exclusive of GST at 18%.
  
  
• In the projects segment, prices were hovering at around INR 51,000-51,500/t FOR Mumbai. Buyers have adopted a wait-and-watch approach, moving to the sidelines in anticipation of further price drops in the near term.
  
  

Finished flat steel

• Trade prices of hot-rolled (HR) and cold-rolled (CR) coils fell across surveyed markets, as cheaper imported alternatives, particularly in HRCs, gained preference.
  
  
• According to reliable industry sources, a few import contracts for September 2024 delivery were finalized in the first half of July. Notably, a shipment of 75,000 t was secured at $562-565/t CFR India during the first week, while an additional 100,000t of HRCs were contracted at $562-566/t in the preceding week. These developments are anticipated to potentially impact market prices in the coming weeks.
  
  
• Imported bulk HRC and plates reached 364,298t till 15 July 2024. Notably, 66,000t of these imports are expected to arrive by July 27th, further impacting domestic market dynamics.
  
  
• Meanwhile, export volumes have decreased compared to the previous month, with Indian steel mills holding export offers to Southeast Asia, the Middle East, and Europe due to competitive Chinese offers and slow domestic demand.