Weekly round-up: Semi-finished steel prices continue to remain under pressure

The domestic steel market saw volatile trend in prices during week 42 ( 16 October-21 October, 2023). Rebar steel prices decreased by up to INR 1,600/tonne (t).

Iron ore and pellets

• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable w-o-w at INR 10,000/tonne (t) DAP Raipur on 20 October, 2023. Deals of 10,000 t were recorded at INR 10,450/t DAP Raipur in this publishing window.
  
  
• Odisha Mining Corporation (OMC) conducted an auction for 3.046 mnt of iron ore (2.159 mnt of fines and 0.887 mnt of lumps) on 18 October. The steelmakers participated actively in the auction, and the entire quantity of fines was booked at INR 4,150-5,250/t ex-mines. Bids for fines increased by up to INR 600/t except for a few minor lots fetching bids higher by INR 800-1,000/t. While 839,000 t or 95% of the total material was booked. Bids for lumps increased by up to INR 500-1,050/t.
  
  
• NMDC concluded an auction for 380,000 t of iron ore from its Donimalai mines on 16 October. 44,000 t of lumps (10-40 mm, Fe 54-59%) were booked at INR 3,498-4,255/t against the base price of INR 2,378-3,235/t. 336,000 t of fines (Fe 54-59%) were booked at INR 2,307-3,528/t against the base price of INR 2,257-3,058/t. Bid prices for lumps and fines were higher by around INR 1,130/t and INR 470/t.
  
  
• SteelMint's India pellet (Fe 63%, 3% Al) export (FOB east coast) index increased by $7.5/t w-o-w to $115.5/t on 18 October. Around 350,000 t of pellet export deals were recorded by SteelMint in this publishing window.
  
  
• SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $3/t w-o-w to reach $76/t FOB east coast on 19 October. Two deals for a total of 110,000 t (Fe57%) were recorded from the east coast at $75-78.5/t FOB in this publishing window. As per sources, another 55,000 t of low-grade iron ore fines (Fe55/56%) were sold at $73/t FOB.
  
  

Coal

• Australian premium hard coking coal prices dropped by 7% w-o-w to $343/t FOB and $359/ t CNF on 21 October amid low trade levels.
  
  
• RB1 (6000 NAR) grade prices remained largely stable on weekly basis to $131.25/t FOB. RB3 prices remained stable w-o-w at $100/t FOB Richards Bay, South Africa.
  
  
• Portside prices of South African RB3 (4800 NAR) thermal coal at Vizag Port were recorded at INR 9,700/t, largely stable w-o-w.
  
  

Ferrous scrap

• The imported ferrous scrap market in India was observed slow this week, with only a few deals reported. Disparities between bid and offer prices, a lack of buying interest, and a slow domestic steel market contributed to the sluggishness in the market.
  
  
• Shredded scrap offers from Europe dropped by $14/t w-o-w to $400/t CFR Nhava Sheva in comparison with $414/t CFR a week ago. HMS (80:20) scrap offers from Europe stood at $382/t, down by $18/t as against $400/t in the preceding week.
  
  
• It is noteworthy that as the week drew to a close, buyers were targeting shredded scrap at a price of $395/t CFR and HMS at $375/t CFR.
  
  
• Steel mills, particularly those in eastern India, had decreased their production rates by 40-50% because of a significant inventory surplus. Consequently, they were cautious about acquiring new raw materials.
  
  

Ferro alloys

• The Indian silico manganese prices remained under pressure w-o-w as the global demand and surfeit supply in the domestic market continued. As of 20 October, 2023, Indian silico manganese (60-14) was traded at around INR 63,800-65,250/t exw Durgapur, Raipur, and Vizag.
  
  
• Prices for Indian ferro manganese (HC70%) dropped by INR 500/t this week amid weak demand for special steel. According to SteelMint, ferro manganese offers in Raipur and Durgapur on 20 October were INR 66,000-65,800/t exw.
  
  
• On 20 October, Indian ferro chrome (HC 60%, Si:4%) prices inched down by INR 2,000/t as traders seemed unenthusiastic in accepting higher offers due to awaited OMC's auction. SteelMint assessed the price of Indian ferro chrome (HC60%, Si:4%) at INR 114,000/t exw-Jajpur.
  
  
• Prices of Indian ferro silicon (FeSi:70%) decreased by INR 700/ this week to INR 103,400/tonne (t) exw-Guwahati, assessed on 20 October. Indulgence in completing deliveries of past orders and deceleration in trading activities caused the prices of ferro silicon to fall.
  
  

Semi-finished

• Indian semi-finished steel prices decreased as per SteelMint's assessment. Domestic billet prices decreased by INR 500-1,700/t across regions, with a major decrease of INR 1,700/t seen in Ahmedabad. Similarly, sponge iron prices also decreased by INR 400-1,550/t, with a major decrease of INR 1,550/t seen in Jharsuguda.
  
  
• NMDC's steel plant in Nagarnar, Chhattisgarh, conducted a steel-grade pig iron auction for a total of 25,000 t on 19 October. 6,500 t quantity was booked at an average price of INR 37,100/t.
  
  
• SAIL-Bhilai Steel Plant (BSP) held an auction for 1,950 t of steel-grade pig iron on 18 October. According to sources, the quantity of 1,950 t was booked at an average price of INR 37,600/t exw.
  
  
• Indian DRI (Direct Reduced Iron) exports offers decreased by approximately $15-20 per tonne (t), reaching $400/t on CPT Raxaul, and $408/t on CPT Benapole.
  
  
• Finished long steel

  IF Route: India's induction furnace route finished long steel market witnessed a price correction this week. Weak buying interest at higher offer prices as well as a price drop in semi-finished steel across various regions were the major factors that prompted manufacturers to decrease offer prices. Sellers were offering attractive discounts in order to boost sales owing to increased inventory pressure. However, buying activities remained slow throughout the week.
  
  

• On a weekly basis, in rebar steel prices decreased by up to INR 1,600/t across the regions, as per SteelMint's assessment.
  
  
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 45,300-45,500/t exw Raipur, INR 50,000-50,500/t exw Jalna.
  
  
• Trade reference price of heavy structural steel for base size 150mm channel stands at INR 48,000-48,200/t exw Raipur.
  
  
• Trade reference prices of wire rod hovering at INR 45,100-45,500/t ex Raipur.
  
  
• BF-route rebar: Trade-level prices of blast furnace (BF) route rebars dropped on weekly basis amid weak buying interest in the domestic market. Demand for rebars has been need based only since the starting of this month as October being a month of festivals like Durga Puja, Dusshera where demand is generally impacted.
  
  
• In the projects segment, prices are currently hovering around INR 55,500-56,500/t FOR Mumbai basis. End-users procured on urgent requirement basis amid fall in prices, limited availability of labour during the festive season impacted construction activities.
  
  
• SteelMint's weekly price assessment for rebars (12-32 mm, BF-route, IS 1786, Fe500D) for the trade segment fell by INR 800/t w-o-w to INR 57,200/t, exy-Mumbai, excluding GST at 18%.
  
  

Finished-flat steel

• Trade-level prices of finished flat steel products continued to slide, dropping by around INR 100-500/t in the markets under assessment. The rising prices of imported coking coal has become a major concern for manufacturers and distributors as demand is slow-paced in the traders' market.

  The festive mood ahead of Dussehra has led to a further softening of demand in the markets with buyers avoiding procurement and distributors keeping their inventories lean. Liquidity concerns are taking up the front seat, impacting the overall distribution network cycle.
  
  

• The buzz about the interim price hike cooled off earlier this week with the market prices showing a gradual decline in the last four assessments. Meanwhile, global prices are on a downtrend and imports are turning viable, which is further adding to the buyers' caution. On the contrary, the Indian government getting more stringent on the BIS certifications for imports should keep it lightweight as this is a mandatory requirement for cargoes from China and Vietnam. However, countries having a free trade agreement (FTA) with India shall not be impacted by the above.
  
  
• On the exports front, Indian mills have remained quiet in the overseas trade turf since the last assessment on 19 September. Better realisation in the Indian domestic market have kept the mills' focus away from exports. Furthermore, buying interest in the Vietnamese and Middle East markets which are the components of SteelMint's India HRC export index have remained low. Cheaper alternatives and preference for domestic products in Vietnam and the geopolitical clash in the Middle East have weighed on the interest on imports of these countries.