Weekly round Up: Semi-finished prices fall w-o-w, Flat steel offers remain strong

The domestic steel market saw downtrend during week 5 ( 30 January- 4 February, 2023). Semi-finished steel prices fell in the range of INR 150-1,300/tonne (t).

Domestic induction furnace finished long steel offers saw a volatile price trend, offers varied up to INR 100-1,400/t w-o-w. The trade reference prices for Hot rolled coils (HRCs) and cold rolled coils (CRCs) rose in the range of INR 300-2,600/t across region.

Iron ore and pellets

• SteelMint's bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 10,150/tonne (t) DAP Raipur, edged down by INR 100/t compared to the last assessment on 31 January, 2023. Around 36,000 t of deals were reported so far this week.
  
  
• SMIORE conducted an auction for 60,000 t of iron ore lumps, out of which 12,000 t (5-20mm, Fe 58.4%) were booked at INR 4,465/t, 8,000 t (5-20mm, Fe58%) at INR 4,415/t and 4,000 t (20-40mm, Fe59.2%) at INR 4,330/t (including royalty, DMF and NMET charges). In addition, Vedanta's auction for 24,000 t of iron ore lumps (Fe57.5%) received bids for the entire quantity at INR 4,076/t against the base price of INR 3,696/t (excluding royalty, DMF and NMET charges).
  
  
• SteelMint's India pellets (Fe 63%, 3% Al) export index FOB east coast was recorded at $126/t, up by $8/t w-o-w. Prices increased following the return of Chinese market participants from the Lunar New Year holidays. Trading was observed to be active in China. After the holidays, most steel mills began purchasing cargoes. Some market participants were optimistic, but they were waiting for better price clarity.
  
  
• AM/NS India conducted auctions of iron ore from Odisha's Sagasahi and Thakurani mines on 31 January, 2023. According to the sources, 40,000 t of lumps (10-30 mm, Fe60%) were booked at INR 5,100/t. On the other hand, 8,000 t of lumps (5-18 mm, Fe62.5%) were booked at INR 7,500/t and 16,000 t of crushed fines (Fe57.5%) were booked at INR 3,450/t against the floor price of INR 3,400/t. Prices include royalty, DMF, and NMET.
  
  

Coal

• Australian premium hard coking coal prices increased sharply by $18/t w-o-w to $350/t FOB amid supply tightness due to the closure of rail corridor in Queensland and wet weather in Australia. In addition, global demand also supported prices.
  
  
• Portside prices of South African RB3 (4800 NAR) thermal coal was stable at INR 11,500/t ex-port Vizag.
  
  
• RB1 (6000 NAR) grade prices have come down by 8% to $146/t FoB while RB3 prices are assessed at $107/t FOB South Africa.
  
  

Ferrous scrap

• Indian scrap buyers continued their small quantity booking for yet another week. Market participants were waiting for the budget, which was announced this week on 1 February. However, no major changes were declared related to scrap duty.
  
  
• Furthermore, market participants opted to wait and watch the direction of prices as Turkish buyers continued to book at increased prices. Notably, prices for suppliers are not viable in India over Turkiye.
  
  
• SteelMint's daily assessment for UK-origin shredded stood at $460/t CFR Nhava Sheva, moving up by $5/t w-o-w.
  
  

Ferro alloys

• As on 3 February 2023, Indian silico manganese prices fell by 3% w-o-w to INR 75,000 exw Durgapur and INR 75,500/t exw Raipur. Prices fell as a result of declining local demand, escalating liquidity issues, and a downbeat global economy.
  
  
• Indian ferro manganese pricex slightly decreased by 2% w-o-w to around INR 77,000/t exw Durgapur and INR 78,000/t exw Raipur, as measured on 3 February 2023. As a result of the limited demand for special steel and the imbalance in supply and demand, prices of ferromanganese iched down.
  
  
• Indian ferro chrome (HC60%) prices inched up by INR 5,400/t w-o-w to INR 116,500/t exw as major Chinese stainless steel giant increased their ferro chrome tender prices by RMB 450/t (USD 67/t) m-o-m for February delivery. This influenced producer to increase their offers.
  
  
• According to SteelMint's assessment on 3 February, ferro silicon (70%) smelters in Bhutan started offering at INR 126,000/t exw. Meanwhile, Guwahati's offers were at around INR 125,000/t exw. Prices inched up w-o-w in early February in anticipation of material shortage due to restrictions on imported material from sellers who did not have a Bureau of Indian Standard (BIS) certificate.
  
  

Semi-finished

• Trades in semi-finished slowed down this week as domestic billets prices decreased by INR 500-1,250/t in all locations. Sponge prices also showed downtrends with price falls in the range of INR 150-1300/t in several locations.
  
  
• SAIL-Bhilai Steel Plant (BSP) conducted an auction for 10,200 t (60 kg and 52 kg, full length) of commercial rails on 28 January, 2023. Out of the total quantity, only 1,950 t were booked and the remaining quantity remained unsold due to a high base price.
  
  
• About 10,000 t of sponge iron (FeM 79-80%, 100% lumps) was sold to Bangladesh recently at $452-455/t CPT Benapole.
  
  

Finished long

India's induction furnace-route finished long steel market witnessed price correction this week in major supplying regions. However, buying inquiries declined further even after prices moved in a downward direction. Moreover, slow lifting of previously booked materials was reported by mills. Traders are procuring material in needful quantity to avoid excess inventory. Even though currently, trades are being concluded at a discounted price in the spot market, buyers have opted for a wait-and-watch mode to get clarity in market directions.

• In rebars steel prices declined by INR 100-1,400/t w-o-w in various regions, except in southern markets which were hiked in the range of INR 200-700/t as per SteelMint's assessment shows.
  
  
• The trade reference price of Fe 500 grade rebars manufactured via the IF-route for 10-25 mm size was assessed at INR 50,800-51,200/t exw Raipur and INR 55,800-56,300/t exw Jalna.
  
  
• Trade discount given by Raipur-based heavy structural steel manufacturers is up to INR 2,500/t and trade reference price of 200 mm angles stood at INR 57,000-57,500/t exw Raipur.
  
  
• Trade discounts in Raipur wire rods given by resellers is over INR 1,000/t and trade reference price is at INR 50,000-50,400/t exw Raipur and INR 50,000-50,400/t exw Durgapur, size 5.5 mm.
  
  
• Trade level prices of BF-route rebars continued to rise this week and are currently hovering at 8-month high levels. This comes after the announcement of up to INR 1,500/t hike in rebars list prices by Tier-I mills. Increase in prices of key steel making raw materials such as iron ore and coking coal lent further support to price hike.
  
  
• SteelMint's weekly price assessment for rebars (12-32 mm, BF-route, IS 1786, Fe500D) increased by INR 1,500/t w-o-w to INR 63,500/t, exy-Mumbai, excluding GST at 18%.
  
  

Finished flat

• Major mills have taken an interim hike in their flat steel list prices in January, and further increased the same for February sales earlier this week. Trade reference prices of flat steel products have been on a rally since 21 December, 2022. Decent export bookings and rising raw material prices continued to influence the mills' pricing decision. This has also resulted in trade level prices hitting multi month highs, highlighted sources.
  
  
• Improved demand from infrastructure projects, automobile, white goods, and green energy segments have led to a supply side crunch in traders' market. "Inflow of material into traders' market from mills has slowed in January, and some mills have a well-covered order booked for February," informed a reliable source.
  
  
• As far as exports are concerned, SteelMint's HRC (SAE1006) export index increased by $10/t w-o-w at $690/t FOB east coast this week, hovering close to end-June 2022 levels. Global market sentiment remains improved, and mills have been concluding exports in the European markets with prices rising in successive deal. HRC export offers were also raised for the Middle East markets. However, mills held back offers for CRC and HDG amid limited allocations and shall be floating offers for mid-March and April shipments in the upcoming weeks.