Weekly round-up: Semi-finished steel prices soften as demand continues to weaken

The domestic steel market witnessed prices seesawing during week 34 ( 20-24 Aug, 2024). Semi-finished steel prices varied in the range of INR 50-700/tonne (t).

Iron ore and pellet

• BigMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable w-o-w at INR 8,950/tonne (t) DAP Raipur on 23 August. Around 61,000 pellet (Fe62.5-63%) deals were recorded in the Raipur region this week. Major pellet producers from Raipur kept their offers stable this week post OMC auction
  
  
• In OMC's auction for 1.515 mnt of iron ore fines (Fe 54-65%) on 20 August, the entire quantity was booked at INR 2,020-4,500/t. While in the lumps auction, out of 1.072 mnt of iron ore lumps (Fe 58-64%), the buyers booked 1.068 mnt (99% of the offered quantity) at INR 3,350-6,200/t. Bids (weighted avg) decreased around INR 500/t for the fines while lumps remained stable compared to last month. Notably, the company has reduced base prices m-o-m by up to INR 200/t in lumps and INR 100-350/t for fines.
  
  
• BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $54/t FOB east coast on 22 August 2024. The market remained silent with no major trades concluded by the Indian iron ore exporters. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) rose by $4/t w-o-w at $91/tonne (t) on 23 August 2024.
  
  
• Asia-Pacific Supramax dry bulk (50,000-55,000 tonnes (t) freight rates for an iron ore vessel from the east coast of India to China rose by $0.14/t w-o-w, reaching $13.14/t on 21 August. Shipowners are resisting lower freight rates due to uncertainty in the shipping industry and tight tonnage supply.
  
  

Coal

• Australian premium hard coking coal dropped by $6/t w-o-w to $198.50/t FOB. The price fell on excessive supply and low buying interest.
  
  
• RB1 (6000 NAR) grade coal prices edged up for the week at $111/t FOB. RB3 prices remained unchanged at $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.
  
  

Ferrous Scrap

• Last week in India, the demand for imported scrap remained subdued as buyers largely stayed away from the market, preferring domestic alternatives that offered better value. The downturn in the Turkish market had a ripple effect, leading Indian buyers to anticipate further price drops. Offers for shredded scrap from the US and UK/Europe lingered around $393-398/t CFR Nhava Sheva, but buyer interest was minimal, with many looking for prices below $390/t. Similarly, HMS (80:20) offers from the UK/Europe at $370-375/t CFR saw little traction. The wide bid-offer gap, coupled with sluggish finished steel sales and higher reliance on DRI and sponge iron, kept the market stagnant. Some southern Indian mills showed slight interest but only if prices hit $365/t. Overall, the market sentiment was cautious, with players waiting for prices to bottom out, likely by September, before resuming bulk purchases.
  
  

Ferro Alloys

• Silico Manganese: Silico manganese prices remained largely stable with a slight decline of around INR 350/t ($4/t) to INR 68,000-68,400/t ($811-816/t) exw in Raipur, Durgapur and Vishakhapatnam. The ups and downs in the Indian silico manganese market are influenced by a mix of local and global factors. These include changes in demand, disruptions in the supply chain, and overall economic conditions.
  
  
• Ferro manganese: India's ferro manganese (HC70%) prices inched down w-o-w by around INR 500/t ($6/t) in Raipur to INR 74,500/t ($889/t) exw. Meanwhile, in Durgapur, prices dropped INR 400/t ($5/t) w-o-w to INR 74,300/t ($886/t). Prices inched down this week as the market demand remained slow and only need based purchases took place.
  
  
• Ferro Silicon: Indian ferro silicon (FeSi:70%) prices inched up by around INR 200/t ($2/t) w-o-w, settling at INR 88,600/t ($1,057/t) exw-Guwahati on 23 August. However, Bhutan's prices inch down by INR 100/t ($1/t) reaching INR 89,000/t ($1,062/t) exw. The stability in prices is attributed to major suppliers focusing on fulfilling tender orders, leading to limited trades in the spot market.
  
  
• Ferro chrome: Prices of Indian high-carbon ferro chrome (HC60%, Si:4%) increased w-o-w, by INR 3,600/t ($43/t) on 23 August, settling at INR 106,700/t ($1,273/t) exw-Jajpu
  
  

Semi Finished

• Indian semi-finished steel prices showed a downward trend, as per BigMint's assessment. Domestic billet prices in almost all key locations decreased by INR 50-700/t, with a major decrease of INR 700/t seen in the Ramgarh market, while the Hindupur region showed a slight uptick of INR 100/t. Similarly, sponge iron prices also decreased in almost all key locations by INR 100-700/t, with a major increase of INR 700/t seen in the Durgapur market meanwhile, prices in Bellary and Hyderabad region shown up by INR 50-100/t.
  
  
• NMDC's steel plant in Nagarnar, Chhattisgarh, conducted a steel-grade pig iron auction for a total of 35,000 t on 20 Aug'24. The whole quantity received bid at an average price of INR 35,100/t.
  
  
• Tata Metaliks has reduced pig iron prices for both basic and foundry grades by INR 1,000/t ($12/t) due to lack of demand at existing prices. Post-revision, prices of foundry-grade pig iron stand at INR 41,500/t ($495/t), while basic grade (Si 1.0-1.5%) prices are at INR 39,000/t ($466/t). Prices are exw-Kharagpur and applicable for Kolkata and Howrah markets.
  
  
• SAIL-Durgapur Steel Plant (DSP) held an auction for 2,500 t of steel-grade pig iron on 23 August 2024. The entire quantity was booked at an average price of INR 35,500/t ex-works.
  
  
• Indian DRI (Direct Reduced Iron) export offers increased for CPT Raxaul by $3/t, reaching $346/t whereas, CPT Benapole offers decreased by $2 and stood at $361/t.
  
  

Finished Long Steel

• IF-rebar: India's induction furnace route finished long steel market witnessed mixed price trend w-o-w. In the start of the week, sellers hiked offers and received average bookings. However, in the later half sellers kept offers stable but fluctuated trade discounts as buying enquiries slowed down eventually because buyers awaited further clarity on the market direction. Currently, a lot of variation in prices can be seen among suppliers due to constant selling pressure. Slow lifting of previously booked material as well as liquidity issue across various regions has also led to subdued buying interest. As per the participants, such volatility in prices and trend may persist in the near-term.
  
  
• On a weekly basis, in rebar steel prices shown a mixed response in the range of INR 100-800/t across the regions except few markets were stable as per BigMint assessment shows.
  
  
• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 41,200-41,600/t exw Raipur, INR 44,400-45,000/t exw Jalna.
  
  
• Trade reference price of heavy structural steel for base size 150mm channel stands at INR 44,300-44,800/t exw Raipur.
  
  
• Trade reference prices of wire rod hovering at INR 42,000-42,500/t ex Raipur.
  
  
• BF-rebar:Trade-level blast furnace (BF) rebar prices witnessed downtrend on weekly basis amid subdued demand across markets, marking the eleventh consecutive week of fall in prices. Current week's rebar prices (12-32mm) in the trade segment dropped by INR 300/t w-o-w to INR 49,600/t exy-Mumbai. Prices are exclusive of GST at 18%.
  
  
• In the projects segment, prices were hovering around INR 47,000-48,000/t FOR Mumbai. Demand from end-users was need basis only.
  
  

Finished flate steel

• BigMint's bi-weekly benchmark evaluation for HRC (2.5-8mm, IS2062, Gr E250 Br) and CRC (0.9mm, IS513 CR1) ex-Mumbai remained stable at INR 50,300/t and INR 57,400/t respectively. All prices exclude 18% GST.
  
  
• The market for traded products experienced subdued demand following a prolonged weekend and the Rakshabandhan holiday. An anti-dumping investigation into imported hot-rolled flat products failed to stimulate a upturn. Excess inventory and a cautious buyer stance contributed to the market's limited activity.
  
  
• As evidenced by BigMint's vessel lineup data cumulative import volume reached 4,01,413t till 19 August 2024. It was 6,36,651t as of July 2024, with an additional 2,22,789t expected to arrive by end of August 2024 and another 1,14,245t in first week of September 2024.
  
  
• Indian steel mills have maintained their restraint on hot-rolled coil (HRC) exports to Southeast Asia and the Middle East (ME) due to robust competition from China and sluggish domestic demand in these regions. Additionally, European buyers are exercising caution because of the summer season.