Weekly round-up: Semi-finished steel prices continue to edge down on soft demand

The domestic induction furnace (IF) steel market saw a negative trend in prices during week 31 (29 July-3 Aug,2024). Semi-finished steel prices moved down by INR 100-600/tonne (t).

Iron ore and pellet

• BigMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 200/t w-o-w to INR 9,100/tonne (t) DAP Raipur on 2 August. Around 20,000 pellet deals (Fe63%) were recorded in Raipur this week after the price hike by pellet producers. Raipur-based pellet makers have increased their offers for Fe 63%(+/-0.5%) by INR 200/t to INR 9,000-9,100/t exw.
  
  
• BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $1.5/t w-o-w to $58/t FOB east coast on 1 August. A few active deals of iron ore fines export were witnessed in the last one week which added up to around 330,000 t. A deal of 55,000 t (Fe 57%) fines was concluded at $70/t CFR China recently. A South India-based exporter sold 2 cargos (110,000 t, Fe57%) at $73/t CFR China a few days ago. Another miner from Odisha sold some cargos at a 20% discount on the global index. However, the transactions are yet to be confirmed from the miner.
  
  
• BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained stable w-o-w at $93/tonne (t) on 31 July 2024. No pellet exports were recorded from India in the last one week. As per sources, the price disparity between buyers and sellers had prevented pellet export deals from India. Few buyers offered around $5-6/t premium on the global fines index which were not accepted by the sellers.
  
  
• 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 dropped by $0.3/tonnes (t) w-o-w to $12.5/t on 31 July. Freight derivative rates experienced a drop during Asian trading hours, reflecting the overall downturn in freights, while bunker prices also decreased this week. Overall, rates remained on the lower side influenced by supply-demand dynamics and fuel price fluctuations.
  
  

Coal

• Australian premium hard coking coal prices fell by $3/t w-o-w to $215/t FOB and $231.25/ t CNF on 2 August. This was due to sufficient material availability and trades taking place at lower levels.
  
  
• RB1 (6000 NAR) grade coal prices picked up by 4% w-o-w to $110/t FOB. Also, RB3 prices also edged up to $75/t FOB Richards Bay, South Africa.
  
  
• Portside prices of South African RB3 (4800 NAR) thermal coal at Vizag Port remained largely stable at INR 7,700/t.
  
  

Ferro Scrap

• This week, India's imported scrap market experienced subdued demand due to persistent bid-offer disparities and an unsupportive steel market. Steel mills increasingly favoured sponge iron over imported scrap, driven by cost-effectiveness. Indicative offers for shredded scrap from the US and UK/Europe were at $410-420/t CFR Nhava Sheva, while buyers aimed for $400-407/t CFR. HMS (80:20) offers ranged from $385-395/t CFR. The ongoing monsoon season has seen slow finished steel sales, leading to production cuts and increased sponge iron usage in steel mills. Despite some buyer inquiries early in the week, the market remained quiet, with buyers prioritising lower-priced alternatives and showing little interest in higher-priced materials.
  
  
• Notably, around 2,000 t of US-origin shredded scrap were booked at approximately $415-416/t CFR West coast India. Additionally, about 900 t of HMS (80:20) were booked, including 400 t from South Africa at $400/t CFR Nhava Sheva and 500 t from the UK at $390/t CFR Nhava Sheva. Around 1,000 t of handloaded HMS scraps were sourced from Latin America at $405-407/t CFR West coast, and approximately 500 t of HMS-LMS bundle mix were bought from Yemen at $375/t CFR Mundra.
  
  

Ferro Alloys

• Silico Manganese: Silico manganese prices remained largely stable w-o-w, inching up by INR 550/t ($7/t) to INR 68,800-69,300/t ($821-827/t) exw across markets (Raipur, Durgapur and Vishakhapatnam). The Indian silico manganese market saw price stability this week after a recent decline. Demand remained subdued amid need-based buying, though price variations persisted among different producers.
  
  
• Ferro manganese: India's ferro manganese (HC70%) prices inched up w-o-w by INR 400/t ($5/t) in Raipur, reaching INR 76,000/t ($907/t) exw. Meanwhile, in Durgapur, prices inch up by INR 900/t ($11/t) w-o-w to INR 76,100/t ($908/t). A spike in prices was observed as smelters used expensive ore, while the market remained stable.
  
  
• Ferro Silicon: Indian ferro silicon (FeSi:70%) prices declined by INR 1,000/t ($12/t) w-o-w, settling at INR 91,000/t ($1,086/t) exw-Guwahati on 2 August. Meanwhile, Bhutan's prices fell by INR 1,700/t ($20/t), reaching INR 91,000/t ($1,086/t) exw. The decline is linked to weakened demand and resistance to previous higher prices.
  
  
• Ferro chrome: Prices of Indian high-carbon ferro chrome (HC60%, Si:4%) dropped by INR 1,700/t ($20/t) on 2 August, settling at INR 105,500/t ($1,259/t) exw-Jajpur Prices dropped as demand remained subdued, which was reflected in Vedanta-FACOR's auction on 29 July where bid prices dropped.
  
  

Semi-finished Steel

• Indian semi-finished steel prices showed a mixed trend . Domestic billet prices in almost all key locations decreased by INR 100-600/t, with a major decrease of INR 600/t seen in the Mandi Gobindgarh market. However, billet prices in the Goa and Chennai markets increased by INR 500/t and 700/t. Similarly, sponge iron prices also decreased in almost all key locations by INR 100-500/t, with a major decrease of INR 500/t seen in the Raipur market. However, sponge iron prices in the Bellary and Hyderabad markets witnessed an uptick of INR 200/t and 250/t.
  
  
• SAIL-Bokaro Steel Plant (BSL) held an auction for 6,000 t of steel grade pig iron on 1 August. The total quantity was booked at an average price of INR 35,900/t exw.
  
  
• Indian DRI (Direct Reduced Iron) export offers increased by approximately $8-12/t, reaching $356/t on CPT Raxaul and $367/t on CPT Benapole.
  
  

Finished Long Steel

• IF-rebar: India's induction furnace-route finished long steel prices observed mixed trends this week. In the initial days of the week, sellers were quoting higher offers. However, buyers chose to stay on the sidelines as they waited for further clarity on price trends. Sellers were forced to lower rates and offer attractive discounts. This led to constant fluctuation in prices throughout the week. Suppliers also reported slow lifting of previously booked material along with limited new bookings. Mills have also resorted to production cuts across various regions as a consequence of subdued buying interest, but inventory levels are still on the higher side. As per participants, a similar trend may persist in the near term.
  
  
  

• On a weekly basis, rebar prices fluctuated in the range of INR 100-1,000/t across regions, as per BigMint assessment.
  
  
  

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 41,500-41,900/t exw Raipur, INR 45,300-45,700/t exw Jalna.
  
  
  

• Trade reference price of heavy structural steel for base size 150mm channel stands at INR 44,700-45,200/t exw Raipur.
  
  
  

• Trade reference prices of wire rod hovering at INR 42,600-43,100/t ex Raipur.
  
  
  
• BF-rebar: Trade-level blast furnace (BF) rebar prices declined w-o-w amid dull buying across markets. Prices have been on decline for 8 consecutive weeks on a row. Market participants adopted a wait-and-watch approach in anticipation of further price drop and waited for mills to announce prices for early-August dispatches.
  
  
• Rebar prices in the current week dropped by INR 900/t w-o-w to INR 50,800/t exy-Mumbai. Prices are exclusive of GST at 18%.
  
  
• In the projects segment, prices were hovering around INR 49,000-50,000/t FOR Mumbai. Buying inquiries remained very limited and market activity was weak amid bid-offer disparity.
  
  

Finished flat steel

• BigMint's bi-weekly benchmark evaluation for HRC (2.5-8mm, IS2062, Gr E250 Br) ex-Mumbai declined to INR 51,300/t ($613/t)as of July30,2024,fromINR53,400/t($638/t) on July 2, 2024. Similarly, CRC (0.9mm, IS513 CR1) ex-Mumbai prices dipped to INR 58,900/t ($703/t)by the end of the period, compared to INR60,300/t(/720t) at the beginning. All prices exclude 18% GST. (INR 1 = USD 0.011943; USD 1 = INR 83.7311)
  
  
• Downstream buyers are exhibiting resistance to current market prices and engaging in negotiations for lower quotations, according to reliable sources. Both buyers and sellers are adopting a cautious stance, deferring purchases and awaiting the steel mills'
  
  
• August price announcements, anticipating potential reductions given the prevailing market conditions.
  
  
• India's HRC and plate imports are on the rise, as evidenced by BigMint's vessel lineup data. Cumulative import volume reached 673,377 tonnes as of July 27, 2024, with an additional 163,557 tonnes expected to arrive in the first half of August 2024.
  
  
• Domestic sales have taken precedence for Indian steel mills this month, with exports to Southeast Asia, the Middle East, and the European Union curtailed amidst intensifying price competition. Moreover, subdued global demand and seasonal weakness in key markets such as Europe and the Middle East have contributed to the decline in export volumes.