Weekly round Up- Semi-finished steel prices edge down on low finished steel demand

The domestic steel market fell during week 21 ( 16 May-21 May'22). Semi-finished steel prices edged down in the range of INR 200-2,500/tonne (t).

Domestic induction furnace finished long steel offers witnessed a downward trend. Offers dropped INR 2,500/t w-o-w. The trade reference prices for finished flats fell in the range of INR 800-2,800/t for HRC and CRC.

Iron ore and pellets

• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 10,100/tonne (t) DAP Raipur on 20 May 2022, down INR 750/t w-o-w. Pellet makers in Raipur cut prices sharply by around INR 800/t on weak demand and falling sponge iron prices.
  
  
• India's pellet export market witnessed limited trades in the last one week due to bid-offer disparity. SteelMint's India pellet (Fe 63%, 3% Al) export index FOB east coast decreased by $5/t w-o-w to $129/t on 18 May from $134/t on 11 May. The index has almost touched a five-month low.
  
  
• The spot price of iron ore in China increased on 20 May as mortgage rates in China were reduced, boosting the demand outlook. Benchmark Fe 62% fines prices increased by $6.85/t to $136.25/t CFR China.
  
  
• Odisha Mining Corporation (OMC) had scheduled an iron ore fines and lumps auction on 19 May in which out of a total 2.11 mnt only 1.47 mn t of material, 936,000 t fines (76%) and 538,000 lumps (61%), received bids. The bid prices fell up to INR 1,550-1,650/t against last month's bid price.
  
  
• SteelMint's weekly index for India's low-grade iron ore fines (Fe 57%) exports stood at $46/tonne (t) FOB east coast, down $5/t w-o-w. Declining global iron ore prices on weaker iron ore and steel futures and preference for lumps in China weighed on bids for Indian ore in China.
  
  

Coal

• In the Australian coking coal market this week prices rose up to $10/t amid improved buying interest and supply crunch due to rains. The latest price for premium grade Australian coking coal is assessed at $525/t FOB Australia and $554/t CNF India.
  
  
• Portside RB2 (5500 NAR) offers remained firm at INR 22,500-23,000/t at Gangavaram Port this week amid elevated imported prices and lower vessel arrival from South Africa in the upcoming weeks.
  
  
• South African RB1 prices were firm at $330/t FOB amid logistic concerns at RBCT Port.
  
  

Ferrous scrap

India's imported scrap market remained active this week in terms of imported HMS. The country's steel mills and buyers booked multiple scrap cargoes to secure deliveries before the monsoons. Meanwhile, domestic volatile prices supported imported scrap trade this week.

Recent deals and offers

• Fresh offers for UK-origin shredded are at $530-535/t CFR levels, down $10/t w-o-w. Notably, offers fell to a five-month low. Around 300-500 t of US-origin shredded scrap was heard sold at $527/t CFR.
  
  
• UK-origin 500 t shredded material was sold at $542/t towards last weekend.
  
  
• 300 t of UAE-origin HMS 1 was sold at $505/t CFR NHSV recently.
  
  
• Another 1,000 t deal for Yemen-origin HMS 1&2 (80:20) was sold at $475/t CFR.
  
  

Interestingly, buyers preferred imported UAE-origin material, considering the landed price of UAE-origin HMS material is cost-effective. Currently, the offers for HMS 1&2 (80:20) are now at $490-495/t (INR 38,000-38,400/t) CFR NHSV and the landed cost will stand at INR 40,000/t, while domestic HMS 1&2 (80:20) is now available at INR 42,700/t Mumbai. However, the prices have inched down by INR 700/t w-o-w.

Ferro alloys

• The domestic ferro alloys market saw bearish sentiments with manganese alloys, ferro silicon and ferro chrome prices declining this week.
  
  
• Silico manganese (60-14) prices edged down w-o-w as the demand for the metal continued to fall and overseas enquiries remained muted. Based on SteelMint's assessment on 20 May, silico manganese prices fell in the range of INR 4,000-5,000/t to INR 83,400-87,000/t ex- Durgapur, Raipur and Vizag.
  
  
• India's ferro manganese (HC70%) prices edged down by INR 1,500-3,000/t w-o-w as buyers didn't show any interest in purchasing commodities. Ferro manganese prices, assessed on 20 May, were in the range of INR 90,000-94,000/t ex-Durgapur and Raipur.
  
  
• Indian ferro chrome (HC60%) prices dropped INR 2,500/t w-o-w to INR 125,000/t exw Jajpur owing to weak domestic and Chinese demand. China's currency depreciation and lockdown restrictions also curtailed demand for Indian ferro chrome.
  
  
• Indian ferro silicon (70%) prices went down due to weak demand amid bearish steel market sentiments as buyers refrained from booking bulk quantities. According to SteelMint's assessment on 20 May, producers were offering at around INR 138,000-140,000/t exw from both Guwahati and Bhutan.
  
  

Semi-finished

Indian semis trades slowed down this week as prices fell in the range of INR 200-2,500/t amid low buying enquiries for finished products in major markets. Billet prices fell sharply in south and east India by INR 2,200-2,500/t. In line with plunging billet prices, sponge iron manufacturers had to reduce their offers in the range of INR 300-1,250/t w-o-w.

• SAIL held an auction for 4,800 t of basic grade pig iron (in 48 units) on 20 May from the Rourkela Steel Plant (RSP). Buyers booked 33 units (3,300 t) at a weighted average price of INR 50,815/t exw.
  
  
• Vizag Steel floated four ocean sale export tenders for 15,000 t of billets, 10,000 t of wire rod coils, 30,000 t of steel blooms and 40,000 t of basic pig iron. The due date for the billet and wire rod tenders is 25 May, while for the for the bloom and pig iron tenders it is 24 May.
  
  
• On 19 May, SAIL conducted an auction for 250 t of basic grade pig iron from its IISCO Steel Plant in West Bengal and buyers booked the entire quantity at INR 50,000/t exw.
  Sunflag Iron & Steel Co. Ltd., Maharashtra, scheduled an auction for 5,000 t of steel grade pig iron. The auction is scheduled for 25 May.
  
  
• SteelMint's bi-weekly price assessment for Indian billet exports (150*150mm, 3SP/4SP, BOF route) stood at around $685/t FOB on 20 May, down $10/t, w-o-w. About 12,000 t of IF-route billet export deals were recorded this week at a price range of $650-660/t exw eastern India, equivalent to $675-685/t CPT Nepal. These offers fell by $25/t w-o-w.
  
  
• Around 10,000 t of sponge iron deals were recorded this week to Nepal at around $450-460/t exw eastern India, equivalent to $470-480/t CPT Nepal for FeM 80% material (70% lumps & 30% fines).
  
  
• Indian steel grade pig iron prices fell by INR 2,400-3,100/t, w-o-w. Prices fell further as supply continued to remain strong on limited exports and resumption in supplies by a few major plants in the domestic market amidst measured demand.
  
  
• Indian sponge iron export offers to Bangladesh dropped to a 4-month low, with fresh deals of around 12,000 t reported at a average price of $440/t CPT Benapole. Similar price levels were last recorded in January.
  
  

Finished Long

India's induction furnace finished long steel market witnessed weak buying enquiries and trades this week across regions. Highly volatile and uncertain price trends in semi-finished steel impacted trading activity as traders and buyers adopted a wait-and-watch stance. Due to the weak market scenario buyers held back from bulk procurement and only needs-based bookings were concluded.

Inventories are piling up at mills although it varies from region to region and they adjusted the trade prices d-o-d as per the movement of steel billet prices in key markets.

• On a weekly basis prices of rebar steel plunged across regions up to INR 2,500/t, SteelMint assessment shows.
  
  
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25mm size was assessed at INR 55,600-56,000/t exw Raipur and INR 56,800-57,200/t exw Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers were around INR 1,000/t and the trade reference price of 200mm angles stood at INR 60,900-61,300/t exw Raipur.
  
  
• Trade discounts given by Raipur-based wire rod suppliers are over INR 1,000/t and trade reference prices stood at INR 54,500-55,000/t exw Raipur and INR 55,500-56,200/t exw Durgapur for 5.5 mm wire rods.
  
  

Finished Flat

• Domestic trade market prices of flat steel products continued to remain under pressure on limited buying interest. Moreover, prices of coated flat steel products, especially galvanised plain coil (GP) and pre-painted galvanised iron (PPGI) dropped to a two-month low this week in the key market of Mumbai.
  
  
• The end-user industrial buyers from infrastructure and construction businesses to OEMs, heavy engineering, fabrication and other MSMEs stuck to needs-based buying. "Projects that are critical in nature or nearing completion from the green energy and infra and construction businesses have been active in procurement on an urgent basis, while others are postponing their purchases amidst the continual drop in prices lately," said a few distributor sources in western and northern India.
  
  
• On the exports front, SteelMint's HRC (SAE1006) export index dropped further by $39/t this week to $821/t FOB east coast India. Last week prices dropped $50/t on a weekly basis. Offers to the Middle East market dropped to $880-900/t CFR contrasted against last week's $890-920/t CFR for July deliveries. Bid offer dispartities emerged in the markets of Vietnam and Europe. Indian mills were offering HRC (SAE1006) to Vietnam at $810-840/t CFR, whereas the bids received stood at around $730/t CFR. Meanwhile, HRC (S275) export offers to Europe stood at around $1,000/t CFR, while the bids were heard lower at $950/t CFR. The softening in global flat steel prices has been a major factor impacting buying sentiments in overseas markets and are, in turn, weighing on export offers from Indian steel majors.