Weekly round-up: Semi-finished steel prices inch up, flats edge lower
The domestic steel market rose during week 23 ( 30 May-4 June 2022) as semi-finished steel prices inched up in the range of INR 100-1,100/tonne (t). Domestic induction fu...
The domestic steel market rose during week 23 ( 30 May-4 June 2022) as semi-finished steel prices inched up in the range of INR 100-1,100/tonne (t).
Domestic induction furnace finished long steel offers increased up to INR 1,300/t w-o-w. Trade reference prices for finished flats, however, declined in the range of INR 1,500-4,400/t.
Iron ore and pellets
- Vedanta subsidiary Electrosteel Steels Ltd (ESL) scheduled an auction for sale of iron ore fines and lump (both Fe 58-60%) on 3 June from its Nadidih BICO and Feegrade mines in Odisha. According to sources, the entire quantity of 50,000 t fines was booked at around INR 1,200-1,250/t (inclusive of royalty) against the base price of INR 1,100/t, while only 5,000 t of lumps were booked out of 40,000 t at the base price of INR 3,100/t.
- India's top iron ore miner NMDC's production stood at 3.20 mnt in May, up 2% m-o-m from 3.15 mnt in April. Production in April-May stood at 6.35 mnt, higher by 7% y-o-y compared to 5.91 mnt in the year-ago period. However, iron ore sales decreased by 15% m-o-m to 2.65 mnt in May.
- India's pellet export market remained silent for yet another week after the announcement of the steep export duty of 45%. An Indian mill floated an export tender for pellets (63% Fe, 8% SiO2+Al2O3). The due date for the tender, meant only for the empanelled customers of the company, was 31 May. The tender was concluded at $125/t FOB, excluding 45% export duty.
- SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,500/tonne (t) DAP Raipur on 3 June, down INR 100/t compared to the last assessment on 31 May. The market is sluggish on weak demand. Not many deals were reported from eastern India after the ones concluded in the first half of the week.
Coal
- In the Australian coking coal market this week prices fell amid low buying interest especially from India and increased availability of surplus unsold stock with sellers. Premium hard coking coal prices fell $46/t w-o-w. Prices on 4 June stood at $419/t FOB Australia and $448/t CNF India.
- Portside RB2 (5500 NAR) prices remained largely stable this week at INR 20,000-21,000/t at Gangavaram Port amid weak buying appetite of sponge iron manufacturers following the hike in export duty on steel. South African RB1 coal prices rose $32/t w-o-w to $327/t FOB following a train derailment and subsequent disruption in coal loading at RBCT.
Ferrous Scrap
- Imported scrap trades picked up pace in the beginning of the week but slowed down towards the weekend. Despite demand in the market buyers were hesitant to book cargoes as current offers were not workable. As per SteelMint assessment, Europe-origin shredded scrap stands at $525/t CFR Nhava Sheva, up $10/t d-o-d.
Ferro Alloys
The domestic ferro alloys market declined this week amid weak demand due to bearish sentiments in the steel market.
- India's silico manganese (60-14) prices fell as demand for the steel dropped continuously in the domestic market. Based on SteelMint's assessment on 3rd Jun, silico manganese prices decreased by INR 1,700/t to INR 80,000/t ex-Raipur, down INR 2,000/t to INR 80,800/t ex- Durgapur and down INR 2,250/t to INR 81,250/t ex-Vizag on a weekly basis.
- Ferro manganese (HC70%) prices fell INR 2,300/t in Durgapur and INR 5,200/t in Raipur w-o-w due to lack of demand. Prices for ferro manganese on 4 June were assessed at INR 86,100/t in Durgapur and INR 86,300/t in Raipur on exw basis.
- Domestic ferro chrome (HC60%) prices decreased by INR 4,100/t w-o-w to INR 115,500/t exw-Jajpur on 2 June owing to limited buying amid production cuts undertaken by stainless steel manufacturers.
- Indian ferro silicon prices dropped due to weak demand as most market participants were in wait-and-watch mode. Suppliers were forced to reduce offers by INR 8,000/t w-o-w to INR 128,000/t exw-Guwahati and Bhutan.
Semi-finished Steel
On a weekly basis, domestic sponge iron offers rose in the range of INR 100-1,100/t across regions, with the major rise of INR 1,100/t seen in Ramgarh, Jharkhand. However, billet prices fluctuated between INR 200-500/t across regions, falling majorly in Chennai and Hyderabad.
- SAIL held an auction for 6,000 t of steel grade pig iron on 1 June from the Bokaro Steel Plant (BSL). Out of the total quantity, buyers booked two rakes ( 4,000 t) at a weighted average price of INR 42,750/t exw.
- Tata Metaliks reduced pig iron offers this week and fresh offers for basic and foundry grades are at INR 51,000/t and INR 54,700/t, respectively. Prices are on exw-Kharagpur basis, applicable for the Kolkata and Howrah markets.
- Punjab State Power Corporation Limited (PSPCL) has hiked power tariff by INR 2/unit during peak hours i.e. 6.00-10.00 pm and revoked the INR 1.25/unit subsidy for night shift from 1 June.
- Western India-based steelmakers have recently concluded a deal for around 5,000 t of induction furnace (IF)-route billets for Africa at around $610-620/t FOB.
- Around 9,000 t of sponge iron deals were recorded this week to Nepal at around $410-420/t exw-eastern India, equivalent to $430-440/t CPT Nepal for FeM 79-80% material (70% lump and 30% fines).
- Indian sponge iron export offers to Bangladesh fell $10/t w-o-w to $400/t CPT Benapole. About 10,000 t of deals were reported this week. About 8,000 t of IF-route billet deals were reported at around $570-580/t exw-eastern India, equivalent to $595-605/t CPT Nepal.
- Indian steel grade pig iron prices fell by INR 800-1,800/t w-o-w. Prices remain under pressure on improved supply, imposition of export duties and falling Indian steel prices amidst sluggish trends.
Finished Long
India's induction furnace finished long steel market witnessed limited buying enquiries and trades this week. High volatility and uncertain price trends in semi-finished steel impacted bulk trading activity as traders adopted a wait-and-watch policy before procuring bulk volumes owing to weak market scenario.
On the other hand, manufacturers in major markets observed moderate purchase enquiries on hardly one or two days, while dull sales were seen during the rest of the week. Even dispatches were not smooth leading to the build-up of inventories at mills across regions which forced an adjustment in trade prices this week, SteelMint learnt from sources. On a weekly basis, prices of rebar steel increased up to INR 1,300/t w-o-w except in south India where a sharp fall of around INR 2,000/t was witnessed in the Chennai market.
- The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25mm size was assessed at INR 49,800-50,200/t exw Raipur and INR 53,800-54,200/t exw Jalna.
- Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 1,200-1,500/t and the trade reference price of 200mm angles stood at INR 55,000-55,500/t exw Raipur.
- Trade discounts given by Raipur-based wire rod suppliers were around INR 2,000/t and trade reference prices stood at INR 48,500-49,200/t exw Raipur and INR 49,800-50,200/t exw Durgapur for 5.5 mm wire rods.
Finished Flat
- Prices continued to move down in the flat steel product segment this week as the steel majors reduced prices significantly for early-June sales.
- Mills' list prices of HRC are now at INR 65,000-65,350/t and CRC at INR 72,850-73,000/t. Meanwhile, for HR plates (E250, 20-40mm), AM/NS India revised prices to downwards to INR 67,500/t whereas JSPL was heard offering at INR 73,000/t for June. Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
- Active bargaining by industrial buyers and end-users sticking to needs-based purchases were major factors weighing on trade market prices, distributor sources told SteelMint.
- Furthermore, after the export tax announcement buyers are anticipating mills to channel more material into the domestic market. This stirred concern amongst distributors and sellers about an impending increase in inventory in the distribution channel. This, in turn, is likely to weigh on prices further with buying interest yet to show signs of improvement in the trader's market.
- The impending arrival of the monsoons is yet another point of concern as infrastructure and construction activities would further decline dragging down demand from allied industries.
- On the exports front, Indian steel majors withdrew from overseas markets after the government slapped a 15% duty on exports of clad, plated or coated flat rolled products of iron or non-alloy steel of 600mm in width or more.