Weekly round-up: Semi-finished steel prices drop amid general demand downtrend

The domestic steel market witnessed a negative trend in prices during week 24 (10 June-15 June, 2024). Semi-finished steel prices fell in the range of INR 1,200-1,800/tonne (t).

Iron ore and pellet

• BigMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained largely stable w-o-w at INR 10,650/tonne (t) DAP Raipur on 14 June. Buyers remained cautious about purchasing amid the weak market sentiments and continuous drop in the sponge and finished steel prices in the central-eastern region. Raipur pellet producer dropped the prices and fresh offers stood at INR 10,700-800/t.
  
  
• NMDC auctioned 302,000 t of iron ore on 10 Jun'24 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.
  
  
• BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) inched down by $1/t w-o-w to $95/t on 12 June 2024. The pellet export prices in the seaborne market remained southward as sellers faced challenges to sell the material amid lower margins. BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $57/tonne (t) FOB east coast on 13 June 2024. No active deals were witnessed this week as most of the buyers were away from the market during the Dragon Boat Festival holidays in China.
  
  
• 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 rose by $0.44/t this week to $14.34/t on 12 June, as per BigMint's assessment. Dry bulk iron ore freight rates exhibited diverse trends this week on key routes. Notably, inquiries for iron ore in the global market have slowed down amid lower buying interest from China.
  
  

Coal

• Australian premium hard coking coal prices remained majorly stable w-o-w at $256.50/t FOB and $274.00/ t CNF on 14th June'24. The prices remain unchanged on thin trading activities.
  
  
• RB1 (6000 NAR) grade prices edged down w-o-w to $109/t FOB. However, RB3 stood stable w-o-w at $79/t FOB Richards Bay, South Africa.
  
  
• Portside prices of South African RB3 (4800 NAR) thermal coal at Vizag Port recorded at INR 8,350/t, stable w-o-w.
  
  

Ferrous scrap

• In India this week, the demand for imported scrap remained sluggish due to weak steel demand and significant bid-offer disparities. Steelmakers preferred cost-effective alternatives like sponge iron to manage production costs. Offers for shredded scrap from the US, UK/Europe, and Australia ranged between $415-425/t CFR, while HMS (80:20) hovered at $395-400/t. No significant purchases were made as buyers were unwilling to meet these prices. Additionally, logistical challenges, including doubled freight rates and extended voyage periods due to sea route disruptions, further stalled buying activities.
  
  
• The domestic finished steel market remained slow, which kept scrap purchasing at a minimal pace. Market insiders noted a significant drop in imported volumes in the first quarter but anticipate a rebound due to infrastructure projects and new housing developments. However, as the monsoon season approaches and with suppliers unwilling to lower their prices, the market outlook remains uncertain for the near term.
  
  

Ferro Alloys

• Silico Manganese:Silico manganese prices in India declined w-o-w by INR 6,650/t ($80/t) to INR 83,000-85,000/t ($993-1,017/t) exw across markets. This price decline has been due to subdued demand in the domestic market despite ongoing cost pressure amidst rising imported ore prices.
  
  
• Ferro manganese:Ferro manganese (HC70%) prices declined w-o-w by INR 900/t ($11/t) in Raipur, reaching INR 94,100/t ($1,126/t) exw. Meanwhile, in Durgapur, prices went down by INR 2,000/t ($24/t) to INR 94,000/t ($1,125/t). Prices declined on lower demand and unacceptance of higher offers in the major producing regions.
  
  
• Ferro Silicon: Indian ferro silicon (FeSi:70%) prices decreased w-o-w by INR 1,100/t ($13/t) settling at INR 96,500/t ($1,155/t) down by INR 1,500/t ($18/t) exw-Guwahati on 14 June. Meanwhile, Bhutan's prices also inched down by INR 700/t ($8/t), reaching INR 97,300/t ($1,165/t) exw. Prices decreased as Bhutan released fresh offer for this month at INR 98,000/t ($1,173/t).
  
  
• Ferro Chrome: Prices of Indian high-carbon ferro chrome (HC60%, Si:4%) prices increased on 14 June, settling at INR 108,100/t ($1,294/t) exw-Jajpur. There were reports of production cuts among major suppliers so offers from remaining stayed on the higher side.
  
  

Semi Finished

• Indian semi-finished steel prices decreased, as per BigMint's assessment. Domestic billet prices in all key locations decreased sharply by INR 1,200-1,800/t across regions, with a major decrease of INR 1,800/t seen in the Mumbai market. Similarly, sponge iron prices also decreased significantly in key locations by INR 600-1,800/t, with a major decrease of INR 1,800/t seen in the Ramgarh market.
  
  
• SAIL-Rourkela Steel Plant (RSP) held an auction for 5,500 t of steel-grade pig iron on 14 Jun'24. 1,500t of the quantity were booked at an average price of INR 38,000/t exw.
  
  
• NMDC Jagdalpur, Chhattisgarh has rescheduled their steel-grade pig iron auction of 10,000 t on 20 June 2024 which was supposed to be held on 14 June 2024.
  
  
• Indian DRI (Direct Reduced Iron) export offers decreased by approximately $8-12/t, reaching $391/t on CPT Raxaul, and $397/t on CPT Benapole.
  
  

Finished Long Steel

• IF-rebar: India's induction furnace route finished long steel prices continued to move down this week. Trading activities remained slow in the spot market owing to subdued buying interest. Sellers were offering attractive trade discount to liquidate material amid rising inventory. However, buyers remained cautious and entered a wait-and-watch mode amid anticipation of further correction in prices. As per market participants, a similar trend might continue in the near-term.
  
  
• W-o-w, rebar steel prices declined by INR 900-1,500/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 46,600-47,000/t exw Raipur, INR 50,700-51,300/t exw Jalna.
  
  
• Trade reference price of heavy structural steel for base size 150mm channel stands at INR 48,600-48,900/t exw Raipur.
  
  
• Trade reference prices of wire rod are hovering at INR 46,700-47,200/t ex Raipur.
  
  
• BF-rebar: Trade-level blast furnace (BF) rebar prices witnessed downtick across major markets owing to weak domestic demand. Inquiries were coming from buyers meanwhile; sales transactions were very less. Buying from end-users remained urgent requirement basis only during the week.
  
  
• Current week's rebar prices (12-32mm) in the trade segment dropped by INR 300/t w-o-w to INR 57,800/t exy-Mumbai. Prices are exclusive of GST at 18%.
  
  
• In the projects segment, prices were hovering around INR 56,500-57,500/t FOR Mumbai.
  
  

Finished Flat Steel

• Hot-rolled coil (HRC) prices remained rangebound. However, cold-rolled (CR) coil prices exhibited a degree of stability. The current state of the trade market reflects persistent sluggishness in trading activity, largely attributable to diminished demand.
  
  
• End users are exhibiting discerning purchasing behaviour, prioritizing cost-effectiveness in their acquisitions. Despite the conclusion of elections, domestic demand remains tepid, showing no notable surge. Factors such as the onset of the monsoon season, heightened import activity, and anticipation surrounding forthcoming budget announcements contribute to the prevailing market dynamics.
  
  
• India's imports of bulk HRC and plates have begun to grow out pacing the exports as per the recent data from the vessel line-up data maintained with BigMint. Imports have been 1,06,014 t till 10 June 2024. Whereas, exports have been 73,832 t in the same period.
  
  
• Import bookings have significantly increased in the past two months, with new participation from Benxi joining established players like JFE, Hyundai, and Formosa.
  
  
• Indian exports of hot-rolled coils (HRC) to Southeast Asia and the Middle East have stalled due to competitive pricing from China and a softening global market. Chinese HRC export offers to the Middle East have declined in response to a steep drop in Shanghai Futures Exchange (SHFE) HRC futures. Similarly, Japanese offerings in the region are at comparable levels, with a limited number of transactions reported.
  
  
• In the European market, a reliable source indicates a shift in buyer preference towards domestically produced HRC due to aggressive pricing by local mills.