Weekly round-up: Semis market witnesses volatility while flat steel prices edge down

The domestic steel market remained volatile during week 37 ( 5-10 September, 2022). Semi-finished steel prices fluctuated in the range of INR 100-1,050/tonne (t).

Domestic induction furnace (IF) finished long steel offers remained mixed, varying in the range of INR 100-1,000/t w-o-w. The trade reference prices for finished flats decreased in the range of INR 300-1,200/t for HRC and CRC. However, HRC prices increased by INR 400/t in the Delhi region.

Iron ore and pellets

• India's largest merchant iron ore mining company, NMDC, kept iron ore prices unchanged for September deliveries, SteelMint learnt from sources.
  
  
• Vedanta subsidiary, Electrosteel Steels Ltd (ESL), scheduled an auction for sale of around 52,000 t of iron ore lumps (Fe58-60%) on 6 September from its Nadidih BICO and Feegrade mines in Odisha's Keonjhar district. Around 20,000 t of lumps were booked at INR 3,800/t, while 32,000 t of lumps were booked at INR 3,850/t (including royalty, DMF and NMET).
  
  
• The spot price of iron ore in China rose on 9 September amid falling port stocks. Benchmark Fe 62% fines prices moved up by $3.85/t to $103.65/t CFR China. As China approaches the mid-Autumn festive season, some steel mills have started sourcing more port stocks for their plants.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,100/tonne (t) DAP Raipur on 9 September. The index remained stable compared to the last assessment on 6 September. Falling sponge iron prices kept buying interest low.
  
  

Coal

• Australian hard coking coal prices remained stable throughout the week at $272/t FOB and $292/t CNF India. Global demand for coking coal turned sluggish over the past two weeks with buyers concluding only need-based purchases. A major European mill shut down its blast furnace due to high energy prices putting downward pressure on coking coal demand.
  
  
• Portside RB3 (4800 NAR) prices eased by INR 500/t w-o-w to INR 13,700/t at Vizag Port with the decline in import prices. Sponge iron manufacturers continued making small parcel deals.
  
  
• South African RB1 (6000 NAR)coal prices fell by $20/t w-o-w to $332/t FOB amid weak enquiries from Europe this week.
  
  

Ferrous Scrap

Indian mills remained quiet as they waited for bulk arrivals. However, deals for small volumes continued to happen from short-sea distances. A few deals were concluded in India due to cost competitiveness against domestic material. A Chennai-based mill was heard booking a 35,000 t of mixed bulk cargo comprising shredded and HMS 1 (90:10) of EU-origin at $415/t CFR. The material will be delivered in November, as per sources. However, the deal remained unconfirmed till the time of publishing this report.

• Recently-concluded Turkish imported scrap deals slowed down other bookings, expecting further price correction.
  
  
• SteelMint's assessment for shredded scrap in India stood at $455-460/t CFR Nhava Sheva, down $20/t w-o-w.
  
  
• Dubai HMS 1 trades remained slow with offers at $470/t CFR levels, down $10-15/t w-o-w.
  
  

Ferro Alloys

• Indian silico manganese (60-14) prices fell marginally by 2% w-o-w to INR 75,000/t ex-Durgapur, INR 75,100/t ex-Vizag, and INR 75,200/t ex-Raipur, as assessed on 9 September. The liquidity crisis forced producers to sell material at lower prices.
  
  
• On 9 September, domestic ferro manganese (HC70%) prices dropped 2% w-o-w to around INR 77,700/t (both ex-Durgapur and Raipur). Selling pressure kept ferro manganese prices under pressure.
  
  
• Domestic ferro chrome (HC60%) prices remained rangebound, falling marginally by INR 1,250/t to around INR 92,750/t exw-Jajpur. Producers are unwilling to reduce prices, sources told SteelMint on 8 September.
  
  
• Guwahati- and Bhutan-based producers were offering 70% grade material at around INR 145,000-150,000/t exw, rangebound over the last few weeks amid moderate demand.
  
  

Semi-finished Steel

On a weekly basis, domestic sponge iron offers declined by INR 300-1,050/t across regions. The major decline of INR 1,050/t was reported from Durgapur.

Billet prices fluctuated in the wide range of by INR 100-1,000/t, with prices in Chennai falling significantly this week.

• SAIL-Bokaro Steel Plant held two auctions for a total of 4,150 t of steel grade pig iron on 7 September. The first auction was for 4,000 t (two rakes). The two rakes were booked at average prices of INR 43,350/t and INR 44,050/t exw, respectively.
  
  
• Vizag Steel floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP) on FOB ST. delivery basis against letter of credit payment terms. The due date of the tender is 15 September.
  
  
• Vedanta Resources reduced foundry grade pig iron offers by INR 1,500/t ($19) to INR 53,400/t delivered (DAP) to Ahmedabad (ex-depot).
  
  
• About 7,500 t of sponge iron (including pellet-based and lump-based DRI) export deals were confirmed to Nepal yesterday. Current offers stand at around $470/t CPT Nepal for FeM 80% material (70% lump and 30% fines), a decrease of $10/t w-o-w.
  
  
• Indian BF-route billet export offers remained stable at around $630-635/t CPT Nepal. However, no fresh deals were reported as Nepali mills turned to procuring Indonesian billets which were cheaper by around $40-50/t compared to Indian cargoes.
  
  
• Spot prices of steel grade pig iron fell by INR 500-1,500/t, w-o-w, with the highest drop of INR 1,000-1,500/t seen in the markets of central and northern India, followed by INR 500-700/t in eastern India.
  
  

Finished Long

India's IF finished long steel market saw limited trades and transactions this week as only need-based buying was witnessed. Due to persistent fluctuations in raw material (sponge iron and billet) prices, the finished steel market remained subdued. Lack of bulk booking and lower spot trades at higher prices dissuaded buyers from taking active positions in the spot market.

Piling up of inventories at mills heightened selling pressure (except in central region), pushing manufacturers either to increase trade discounts or cut offers, as per the movements in raw material prices.

On a weekly basis, prices of rebar fluctuated across regions. In north and central India, prices increased by INR 100-600/t, while in the rest of the country they plunged by up to INR 1,000/t w-o-w, as per SteelMint assessment.

• The trade reference price of Fe 500 grade rebar manufactured via the IF route for 10-25 mm size was assessed at INR 51,300-51,700/t exw Raipur and INR 54,100-54,500/t exw Jalna.
  
  
• Trade discounts given by Raipur- based heavy structural steel manufacturers stood at INR 1,500/t and the trade reference price of 200 mm angle stood at INR 56,800-57,200/t exw Raipur.
  
  
• Trade discounts offered by Raipur-based wire rod suppliers hovered around INR 500-800/t and trade reference prices for 5.5 mm wire rod stood at INR 51,300-51,600/t exw Raipur and INR 50,800-51,000/t exw Durgapur, .
  
  
• The continued fall in IF-route rebar prices, besides sluggish domestic demand for finished steel, is not providing support to BF rebar prices. The gap between BF-route and IF-route rebar stood at INR 1,700/t on 9 September.
  
  
• "At present retail sales are negligible and we expect the market to go down further," a trader source said. Project sales are hovering around INR 54,500-55,000/t on landed basis.
  
  
• SteelMint's weekly price assessment of rebar (12-32mm, BF-route, IS 1786, Fe 500D) stands rangebound at INR 56,000-56,500/t ($703-710/t) exy-Mumbai, excluding GST at 18%.
  
  

Finished Flat

• Trade level prices of finished flat steel products showed mixed movements this week. The prevailing festive mood kept market activities muted over the past couple of weeks, yet trades are happening as prices have become viable. Prices of HRC and CRC dropped marginally while those of plates and coated steel remained rangebound. Prices have almost hit the bottom, credible sources informed.
  
  
• Demand for plates was relatively better while the demand for coated steel remained weak on seasonal factors.
  Furthermore, distribution network participants are now unwilling to reduce prices as the mills indicated a mid-term upward revision soon.
  
  
• Mills had announced list prices at INR 56,500-57,000/t for HRC (IS2062, 2.5-8mm) and INR 63,500-65,000/t for CRC (IS513, GR O, 0.9mm) for early-August sales a week back.
  
  
• On the other hand, SteelMint's India HRC (SAE1006) export Index dropped marginally to $575/t FOB east coast, after staying at $583/t FOB for four consecutive weeks. However, Indian mills started indicating higher offer levels in anticipation of an announcement on export duty soon. Some mills were heard offering $630/t CFR Vietnam, up from $610/t CFR on Tuesday last.
  
  
• Meanwhile, mills started offering boron-added HRC to Turkiye concluding a deal for 20,000 t at $610/t CFR a week back. Fresh indications are at around $650-660/t CFR Turkiye, up from $630/t CFR in the beginning of the week. Mills are most likely to find more opportunity for exports as industrial electricity costs are surging in Europe and Turkiye, EXIM trade sources informed.