Weekly round-up: Semis market remains weak on muted finished steel demand

The domestic steel market exhibited bearish trends during week 29 ( 11 July-16 July, 2022). Semi-finished steel prices fell in the range of INR 200-2,200/tonne (t).

Domestic induction furnace finished long steel offers fell by up to INR 1,500/t w-o-w. Trade reference prices for finished flats fluctuated in the range of INR 100-800/t for HRC and CRC.

Iron ore and pellets

• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,800/t DAP Raipur on 15 July. Around 26,500 t of pellets (Fe 62/Fe 63%) deals were heard this week at around INR 8,650-8,950/t DAP Raipur.
  
  
• State-run Odisha Mining Corporation (OMC) has decreased the base price for fines by up to INR 150/t. For lump, however, base prices have remained largely unchanged except for material from the Jilling mine for which the base price was reduced by INR 400/t as against the price in the last auction, which was held on 23 June.
  
  
• NMDC reduced base prices for iron ore fines by up to INR 300/t and for lumps by up to INR 100/t for today's auction from the Donimalai mines. The current floor price of fines (Fe 62%) is INR 2,122/t, while Fe 63% fines prices are at INR 2,215/t (basic, excluding royalty). The base price of lump (Fe 64%) stands at INR 2,660/t (basic, excluding royalty).
  
  
• India's pellet export market remained silent for yet another week as overseas buying interest in pellets, particularly from China, remained low. Drop in iron ore and steel futures weighed down pellet buying sentiments.
  
  

Coal

• Australian premium hard coking coal prices fell by $20/t w-o-w from $258/t FOB to $238/t. The decline stemmed from the fact that the global steel market remained bearish despite the possibility of heavy rains in Australia disrupting supplies.
  
  
• Portside RB3 (4800 NAR) prices remained firm at INR 16,000/t at Gangavaram this week amid strong coal import prices and weak domestic supply compelling sponge iron manufacturers to stick to small parcel trades.
  
  
• South African RB1 coal prices were reported higher at $353/t FOB in the wake of South African rail operator Transnet Freight Rail's scheduled maintenance shutdown till 22 July and strong European demand.
  
  

Ferrous scrap

Imported scrap demand in India continued to remain subdued due to limited demand during monsoons, ongoing currency devaluation and the Eid holidays. Negative market sentiments and the absence of Turkey due to the Eid holidays also impacted the scrap import market. Meanwhile, buyers are also holding fresh bookings and opted to wait for clear market direction to emerge next week. Around 1,200 t of HMS-1 of Dubai origin was traded at $480/t CFR Nhava Sheva towards the weekend.

• SteelMint's assessment of Europe-origin shredded scrap prices stood at $480-485/t CFR Nhava Sheva, up $10-15/t w-o-w.
  
  
• Dubai origin HMS-1 scrap prices stood at $480/t CFR Nhava Sheva, down $5-10/t w-o-w.
  
  

Ferro alloys

• Exported silico manganese prices for 60-14 grade fell by $30/t w-o-w. 60-14 grade prices were at $1,030/t and for 65-16 grade offers were at $1,150/t at Indian ports amid muted demand. Meanwhile, domestic silico manganese prices dropped INR 960/t to INR 81,300 /t ex-Durgapur, down INR 1,660/t to INR 82,480/t ex-Vizag and by INR 1,200/t to INR 82,130/t ex-Raipur on a weekly basis.
  
  
• Exported ferro manganese prices fell amid sluggish demand. Weekly average prices for HC 70% grade material fell by $23/t at $1,086/t, and HC 75% grade prices dropped by $ 14/t to $1,192/t on FOB India basis. Meanwhile, domestic ferro manganese prices fell by INR 1,580/t to INR 86,240/t ex-Durgapur, while ex-Raipur prices were at INR 87,460/t, down INR 1,400/t on week.
  
  
• Indian ferro chrome prices fell due to weak demand as the stainless steel market remained under pressure. Production curtailment by stainless steel mills led to lower demand for ferro chrome. According to SteelMint's assessment on 14 July, ferro chrome (HC60%) prices fell by INR 2,250 /tonne (t) w-o-w to INR 103,500/t exw- Jajpur.
  
  
• Indian ferro silicon prices hovered around INR 147,000- 150,000/t exw-Guwahati and Bhutan, as assessed on 15 July. Prices remained almost stable with marginal fluctuations w-o-w, as both buyers and sellers agreed on prevailing prices.
  
  

Semi finished

On a weekly basis, domestic billet prices fell sharply by INR 200-2,200/t across regions. Prices fell sharply in Rourkela ,Hyderabad and Raipur by INR 2000-2,200/t, whereas the sponge iron market saw volatility, with prices fluctuating in the range of INR 100-500/t on oscillating demand.

• SAIL held an auction for 4,000 t of steel grade pig iron on 15 July from the Rourkela Steel Plant. Buyers booked the entire quantity at a weighted average price of INR 46,965/t exw.
  
  
• SteelMint's weekly India sponge iron export price assessment rose by $10-15/t to $475-480/t CPT Nepal, (FeM 80%, lumps 70%, fines 30%). Offers for Bangladesh stand at $430-435/t CPT Benapole.
  
  
• SAIL conducted an auction on 11 July for 10,500 t of basic pig iron from the Bhilai Steel Plant. Buyers booked the entire quantity at an average price of INR 46,960/t exw.
  
  
• Electrosteel Steels(ESL Steel) concluded a tender for 1,000 t of steel grade pig iron on 13 July. The bid prices in the tender were reported at around INR 48,400/t exw Bokaro.
  
  
• Tata Metaliks has raised pig iron prices by INR 1,000/t ($13). Fresh offers for foundry grade are at INR 52,700/t and basic grade (Si 1.0-1.5%) at INR 49,700/t exw Kharagpur. Prices are applicable for Kolkata and Howrah.
  
  
• SAIL held two auctions for steel grade pig iron on 13 July from Bokaro Steel Limited. In the first auction for 2,000 t, buyers booked the entire quantity at INR 46,100/t exw, while in another auction for 150 t (delivery by road), the entire quantity was booked at INR 46,200/t exw.
  
  

Finished long

India's induction furnace finished long steel market saw subdued trading this week across key locations. Volatility in prices of semi-finished steel in the middle of the week and the subsequent crash in prices in north and central India led to traders and buyers adopting a wait-and-watch policy as regards bulk procurement in an uncertain market. On the other hand, seasonal rainfall in many regions impacted spot trading activities. These factors drove manufacturers to adjust prices either by offering trade discounts or by slashing offers, SteelMint learnt from sources.

On a weekly basis, prices of rebar steel dropped in the range of INR 300-1,500/t w-o-w in most markets, while in a few other locations prices remained stable throughout the week, as per SteelMint assessment.

• The trade reference price of Fe 500 grade rebar (10-25 mm) manufactured via IF was assessed at INR 53,300-53,700/t exw Raipur and INR 55,900-56,300/t exw Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 1,500-2,000/t and the trade reference price of 200 mm angles stood at INR 58,600-59,000/t exw Raipur.
  
  
• Trade discounts offered by Raipur-based wire rod suppliers were at INR 1,500/t and the trade reference price stood at INR 53,300-53,700/t exw Raipur and INR 54,300-54,500/t exw Durgapur for 5.5 mm wire rods.
  
  

Finished flat

• Trade level prices of products across the flat steel portfolio remained rangebound on slow-yet-steady demand and limited availability of material in the distribution network that provided some support to prices. Distributors and other sellers though kept offering at similar levels to last week, as buyers continued to bargain amid concerns about losses due to decline in prices.
  
  
• Mills opting for maintenance shutdowns has led to some pick up in market activities. "The distributors and whole-sellers who had slowed down purchase over the past couple of months are now turning active. There is the requirement to replenish inventories," a mill-based source said.
  
  
• On the other hand, demand from the end-users remained steady, although procurement is yet to gather steam. "Sentiments have improved slightly over the past few weeks. But demand is still slow and buyers continue to purchase as per immediate requirements. Thus, mills are adjusting to slow demand that has lent support to prices. It would not be wise to say that buying interest has improved at the ground level," a distributor source based in western India informed.
  
  
• Another factor to watch out for is the growing viability of HRC imports. Chinese and Russian cargoes are being booked at cheaper rates, which is likely to pose a challenge for domestic mills and impact trade-level prices in the near term.
  
  
• SteelMint's India HRC (SAE1006, boron added) export index dropped by another $5/t this week to $640/t FOB east coast. In the face of low buying interest for boron-added HRC, mills are finding it hard to conclude deals to Europe and the UAE.
  
  
• Meanwhile, domestic producers in Vietnam are also reducing prices making it still more challenging for Indian mills. Formosa Ha Tinh reduced its skin-passed HRC (SAE1006) price to $655/t CIF Ho Chi Minh City (HCMC) for September and early-October dispatches. This is lower than $720/t CIF HCMC levels for August and early-September sales.