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

The domestic steel market witnessed a downtrend in prices during week 25 (17 June-22 June, 2024). Semi-finished steel prices fell in the range of INR 1,000-2,000/tonne (t).

Iron ore and pellet

• BigMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, sharply fell by INR 800/t w-o-w to INR 9,850/tonne (t) DAP Raipur on 21 June. Around 40,000 t pellet (Fe62.5-66%) deals were concluded in the Raipur region. Pellet prices in Raipur remained under pressure amid weak market sentiments and limited trade. The significant drop in the sponge pellet and finished steel prices kept the pellet market under stress which resulted in minimal trading activity.
  
  
• NMDC auctioned 302,000 t of iron ore on 10 June, 2024 from its Kumaraswamy mines. Around 106,000 t lumps (10-40 mm, Fe 61.08-62.60%) were booked at INR 4,983-5,821/t against the base price of INR 4,963-5,337/t. While 196,000 t fines (Fe 58.97-62.86%) got booked at INR 4,063-5,204/t against the base price of INR 3,833-4,664/t. Prices are on ex-mines basis, including royalty, DMF and NMET.
  
  
• In OMC's auction for 2.917 mnt of iron ore fines (Fe 54-65%) conducted on 20 June, 2024, around 1.68 mnt (94% of the offered quantity) fines were booked at INR 2,570-5,750/t ex-mines while around 1.114 mnt (99% of the offered quantity) of lumps fetched bids of INR 3,750-7,150/t. Bids decreased around INR 1,000/t and INR 1,100/t (weighted average) for the majority of fines and lumps lots against last month respectively.
  
  
• BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) inched up by $1.5/t w-o-w to $96.5/t on 19 June 2024. An eastern India-based pellet producer has recently concluded an export deal for 60,000 t of pellets (Fe63%, 8% SiO2+ Al2O3) at around $116-117/t CFR China for July, 2024 shipment. BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $1/t w-o-w to $58/t FOB east coast on 20 June 2024. A prominent exporter from Odisha sold 55,000 t of Fe57% cargo this week but the transaction is yet to be confirmed by the seller.
  
  
• 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 inched down by $ 0.24/t this week to $14.1/t on 19 June, as per BigMint's assessment. Chinese buyers remained cautious about booking iron ore from India amidst the onset of monsoon which may slightly hamper July-August 2024 shipments due to increased moisture content in cargoes
  
  

Coal

• Australian premium hard coking coal prices fell by 7% w-o-w to $239/t FOB and $256.4/ t CNF on 21 June, 2024. The prices fell on sufficient July loading cargoes and trades being concluded at lower levels.
  
  
• RB1 (6000 NAR) grade prices edged down w-o-w to $108/t FOB. Also, RB3 prices dropped to $78/t FOB Richards Bay, South Africa.
  
  
• Portside prices of South African RB3 (4800 NAR) thermal coal at Vizag Port were recorded at INR 8,250/t, inched down w-o-w.
  
  

Ferro scrap

• During the week, India's demand for imported ferrous scrap declined significantly due to weak finished steel sales and bid-offer mismatches. Indian buyers showed little interest in imported scrap, anticipating further declines in steel prices and facing domestic market volatility. This hesitance was compounded by a shift towards more cost-effective raw materials, such as sponge iron, which offered a cheaper alternative. Despite offers for US and UK/European shredded scrap softening to $414-417/t CFR Nhava Sheva and HMS (80:20) from UK/Europe and West Africa at $390-395/t CFR, buyers remained disinterested.
  
  
• Domestic HMS (80:20) scrap prices on a weekly average basis stood at INR 36,300/t DAP Mandi and INR 35,300/t DAP Jalna, marking a drop of INR 1,200-1,300/t w-o-w. Meanwhile, sponge iron prices fell by INR 1,600/t to INR 27,000/t compared to the previous week.
  
  
• Notably, around 1,000 t of shredded scrap were booked from the US at around $414/t CFR, followed by 1,000 t of UK-origin HMS (80:20) at $388/t CFR, and 500 t of turning boring scraps were sealed at $360/t CFR.
  
  

Ferro alloys

• Silico manganese: Silico manganese prices in India dropped to a 2-month low w-o-w by INR 4,650/t ($56/t) to INR 78,700-80,000/t ($942-957/t) exw across the markets of Raipur, Durgapur and Vishakhapatnam. This downfall in the prices occurred because of the poor domestic demand and rigidity towards higher quotes in the market.
  
  
• Ferro manganese: Ferro manganese (HC70%) prices declined sharply w-o-w by INR 5,500/t ($66/t) in Raipur, reaching INR 88,600/t ($1,060/t) exw. Meanwhile, in Durgapur, prices went down by INR 5,000/t ($60/t) to INR 89,000/t ($1,065/t). Prices witnessed a downturn as the market diluted attributed to poor demand and unacceptance of higher quotes.
  
  
• Ferro silicon: Indian ferro silicon (FeSi:70%) prices remained largely stable w-o-w with slight decline by INR 200/t ($2/t) settling at INR 96,500/t ($1,155/t) unchanged exw-Guwahati on 21 June. Meanwhile, However, Bhutan's prices inched down by INR 200/t ($2/t), reaching INR 97,100/t ($1,162/t) exw. Due to mismatches between bids and offers, prices decreased, posing challenges for Bhutan's sustained market presence.
  
  
• Ferro chrome: Prices of Indian high-carbon ferro chrome (HC60%, Si:4%) prices inched up w-o-w by INR 1,900/t ($23/t) on 21 June, settling at INR 110,000/t ($1,316/t) exw-Jajpur. Prices had been steadily increasing before last week's Vedanta-FACOR auction raised offer prices.
  
  

Semi-finished

• Indian semi-finished steel prices decreases as per BigMint's assessment. Domestic billet prices in all key locations decreased by INR 1,000-2,000/t across regions, with a major decrease of INR 2,000/t seen in the Goa and Hyderabad markets. Similarly, sponge iron prices also decreased in key locations by INR 600-2,000/t, with a major decrease of INR 2,000/t seen in the Mandi Gobindgarh market.
  
  
• SAIL-Bhilai Steel Plant (BSP) held an auction for 3,950 t of steel-grade pig iron on 20 Jun'24. According to sources, the entire quantity was booked at an average price of INR 38,000/t exw.
  
  
• NMDC, Nagarnar Steel Plant Jagdalpur has cancelled an auction for steel-grade pig iron of 15,000 t on 20 June'24.
  
  
• Indian DRI (Direct Reduced Iron) export offers decreased by approximately $22-31/t, reaching $360/t on CPT Raxaul, and $375/t on CPT Benapole.
  
  

Finished long steel

• IF-rebar:India's induction furnace route finished long steel market sentiment continued to remain gloomy this week. Prices witnessed a further round of correction owing to weak buying interest at the moment. Constant drop in offers for nearly three consecutive weeks has turned buyers cautious and they have entered a wait-and-watch mode and looking at the bottom level of prices. Suppliers have lowered offers due to consistent rise in inventory levels, however, trading activities still lack pace. If the ongoing scenario persists, mills may resort to production cuts in the near-term.
  
  
• On a weekly basis, in rebar steel prices witnessed sharply declined by upto INR 2,000/t across the regions as per BigMint assessment shows.
  
  
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 44,600-45,000/t exw Raipur, INR 48,700-49,300/t exw Jalna.
  
  
• Trade reference price of heavy structural steel for base size 150mm channel stands at INR 47,200-47,700/t exw Raipur.
  
  
• Trade reference prices of wire rod hovering at INR 44,800-45,300/t ex Raipur.
  
  

• BF-rebar: Trade-level blast furnace (BF) rebar prices declined on the week across major markets owing to sluggish domestic demand. Buyers remained on sidelines amid fall in prices and were cautious in making purchase decisions which kept demand need based only.
  
  
• Current week's rebar prices (12-32mm) in the trade segment dropped by INR 500/t w-o-w to INR 57,300/t exy-Mumbai. Prices are exclusive of GST at 18%.
  
  
• In the projects segment, prices were hovering around INR 56,000-57,000/t FOR Mumbai.
  
  

Finished flat steel

• Prices of hot-rolled coil (HRC) have maintained stability, consolidating within the range of INR 52,600-55,900/t. Concurrently, cold-rolled (CR) coil prices have shown a similar trend, remaining steady within the range of INR 58,000-63,400/t across diverse markets.
  
  
• The HRC market is currently exhibiting persistent sluggishness, with a notable decline in sales volume. This softness in demand has put downward pressure on prices, as buyers are increasingly seeking negotiations below listed rates.
  
  
• According to vessel line-up data monitored by BigMint, India imported a total of 171,725t of bulk HRC and plates by 17 June 2024. By May 2024, the cumulative import volume had reached 357,329t. It is expected that an additional 174,461t of bulk HRC and plates will arrive by the end of June 2024.
  
  
• India exported 73,832 t of bulk HRC and plates by 17 June 2024. The total export volume for May 2024 reached 252,673 t.
  
  
• Indian exports of HRC to Southeast Asia and the Middle East (ME) remained subdued over the past week, influenced by sluggish global market sentiments compounded by Eid holidays. Meanwhile, HRC export offers (S275, 3mm) to Europe unchanged this week, focusing on the domestic market as a priority.