Weekly round up: Semis prices witness downtrend amid low steel demand

The domestic steel market fell during week 35 ( 22 August- 27 August 2022). Semi-finished steel prices plunged in the range of INR 200-1,500/tonne (t).

Domestic induction furnace finished long steel offers saw a downward trend as offers dropped by up to INR 1,800/t w-o-w. The trade reference prices for finished flat steel (HRCs and CRCs) decreased in the range of INR 100-1,700/t.

Iron ore and pellets

• In Odisha, steel major JSW Steel Ltd scheduled an auction for 201,450 t of iron ore lumps (10-40 mm, Fe 61-62%) from its Narayanposhi mines in Odisha. Out of the total quantity, only 23,700 t was booked at the base price of INR 4,900/wet metric tonne (WMT) ex-mines, including royalty, DMF and NMET, market sources reported to SteelMint.
  
  
• NMDC scheduled two iron ore auctions from Chhattisgarh. The first is for 159,600 t of both fines and lumps (Fe64-67%, indicative) from the Bacheli mines, while the second is for 134,400 t of fines and lumps (Fe64-65.50%, indicative) from the Kirandul mines. Both are scheduled for 29 Aug'22.
  
  
• In a significant development of this week, Supreme Court of India raised the iron ore production ceiling in Karnataka from the current 35 million tonnes (mnt) to 50 mnt from the A and B category mines in the state, as per latest updates with SteelMint.
  
  
• The spot price of iron ore in China rose on 26 Aug'22 due to improved seaborne liquidity. Benchmark Fe 62% fines prices moved up by $3.55/t to $105.80/t CFR China.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,400/tonne (t) DAP Raipur on 26 August, 2022, down around INR 400/t compared to the last assessment on 19 August.
  
  

Coal

• Australian hard coking coal prices remained rangebound this week at $274/t FOB and $293/t CNF India. There is no major improvement in demand while la nina alert in Australia that would affect the supplies supported prices.
  
  
• Portside RB3 (4800 NAR) prices remained within a range of INR 14,800-15,000/t at Vizag Port amid weak procurement demand from sponge iron manufacturers following increased usage of alternate origin coal.
  
  
• South African RB1 (6000 NAR) prices rose by $5/t w-o-w to $340/t FOB as a sharp rise in global LNG prices kept high-CV coal demand higher in Europe.
  
  

Ferrous scrap

Imported scrap prices weakened towards the weekend. Both sellers and buyers opted for a wait-and-watch mode as bulk vessels arrive and on limited buying activities due to weak finished steel demand. However, few deals were heard towards the weekend for shredded and HMS at slightly low offers.

• SteelMint's assessment for shredded scrap in India stood at $480-490/t CFR Nhava Sheva, down by over $20/t w-o-w.
  
  
• Dubai-origin HMS 1 was being offered at $490-500/t CFR levels, down by $15/t w-o-w.
  
  

Ferro alloys

• SteelMint's assessment of Indian silico manganese (60-14) prices was range bound w-o-w to INR 78,000/t ex-Durgapur, INR 77,700/t ex-Vizag, and INR 78,700/t ex-Raipur on 26 August amid mixed sentiments in domestic market.
  
  
• As on 25 August, Indian ferro manganese (HC70%) prices were unchanged w-o-w to INR 80,500/t ex-Durgapur and Raipur both. Ferromanganese prices were stable due to muted demand in special steel.
  
  
• Indian ferro chrome prices remained stable amid moderate demand this week. According to SteelMint assessment on 25 August, most of the producers were offering HC60% grade material at around 95,000/t exw-Jajpur.
  
  
• According to SteelMint assessment on 26 August, ferro silicon (70%) offers were at around INR 150,000/t exw from both Guwahati and Bhutan, rangebound this week amid moderate demand.
  
  

Semi finished

Indian semis trade slowed down this week as prices slumped by INR 200-1,500/t amid limited inquiries of finished products in major markets.

Domestic billet prices decreased by INR 300-1,500/t while sponge manufacturers, being under pressure, reduced their offers by INR 200-800/t, w-o-w.

• Rourkela Steel Plant (SAIL) held an auction for 2,000 t of steel grade pig iron on 27 August. The entire quantity was booked at an average price of INR 45,607/t exw.
  
  
• Vizag Steel floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP) on FOB ST. delivery basis against 100% advance payment terms. The delivery is scheduled for 5 October.
  
  
• Bokaro Steel Plant (SAIL) held an auctions of steel grade pig iron on 24 August and no bid was placed for the quantity of 2,000 t (1 rake) with base price at INR 45,000/t exw.
  
  
• SAIL conducted an auction for 11,500 t (60 kg and 52kg, full length) of commercial rails on 22 August from Bhilai Steel Plant (BSP). The auction saw dull participation.
  
  
• Over 26,000 t of sponge iron (including pellet based DRI and lumps based DRI) export deals were confirmed to Nepal this week. Current offers hovered around $485-490/t CPT Nepal for FeM 80% material (70% lump and 30% fines).
  
  
• About 16,000-17,000 t of BF-route billet export deals were reported at around $630-640/t CPT Nepal, down by $10/t, w-o-w.
  
  
• Spot prices of steel grade pig iron fell by INR 700-1,200/t, w-o-w, with a major drop of INR 1,100-1,200/t in north-east markets, followed by INR 700/t in central India. Declining steel prices weigh on pig iron prices.
  
  

Finished long

India's finished long steel market of induction furnace route, saw need-base procurement throughout this week. Due to uncertain price trend in raw material (sponge iron and billet) in the spot market, buyers were less interested in booking in bulk quantity and preferred to wait and watch.

In long steel particularly on heavy structure steel segment in Raipur, demand was subdued throughout the week despite higher trade discounts. Also, other commodities like rebar and wire rod witnessed weak buying and lack of active bookings which resulted in rising of inventories at mills. Manufacturers either reduced their offers or gave trade discounts as per the raw material price movement.

• On a weekly basis, prices in rebar steel plunged by INR 200-1,800/t w-o-w across the region, as SteelMint 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 50,700-51,100/t exw-Raipur and INR 54,800-55,200/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers were hovering at INR 1,500-2,000/t depending on mills. Trade reference price of 200 mm angles stood at INR 57,000-57,500/t exw-Raipur.
  
  
• Trade discounts given by Raipur- based wire rod suppliers were at INR 500-700/t and trade reference prices stood at INR 52,000-52,500/t exw Raipur and INR 51,300-51,500/t exw-Durgapur, size 5.5 mm.
  
  
• Demand for blast furnace-route rebar continued to remain low in the domestic market owing to slow offtake by retailers because of continual decline in prices.
  
  
• SteelMint's weekly price assessment of rebar (12-32mm, BF-route, IS 1786, Fe500D) stood at around INR 56,000-57,000/t ($700-713/t), range-bound w-o-w. Prices mentioned are on exy-Mumbai basis, exclusive of GST at 18%.
  
  

Finished flat

• Prices of finished flat steel products came under pressure yet again this week despite the slight improvement in the sales activities at the beginning of the month. End-industrial buyers sidelined themselves awaiting the September month price announcement as the month is coming to an end, while the market was mostly inactive in the previous because of holidays.
  
  
• Although iron ore and coal prices having gained some strength in the recent past didn't do any good to the finished steel price levels. Unlike the slightly stabilised demand of base flat steel material (HRC and CRC), demand for value added coated steel products was weighed down by the seasonal factors and so were their prices. The decline in trade level price was not that steep as mills supressed the pressure by the curtailed production levels as they opted maintenance shutdowns keeping supplies tight for the distributors.
  
  
• On the other hand, exports of HRC continued to remain suppressed because of the export duty and boron added to the base form of flat steel products including CRC and HDG. This week, SteelMint's India HRC export index remained stable at $583/t FOB after gaining $13/t a week ago.
  The HRC export deal was confirmed for 15,000-20,000t at $640/t CFR Middle East for end-September delivery. However, mills continued to find it difficult to gain traction in the Southeast Asian and European markets obviously boron addition being the prime concern.
  
  
• Market participants were of the opinion that mills are likely to pull down their September sales prices against those of early-August sales. The quantum of drop remains a question, while most of the trade channel participants including some end-buyer industries estimate it to be in the tune of INR 1,000-1,500/t.