Weekly round-up: Semis market remains volatile; flat steel prices decline

The domestic steel market remained volatile during week 47 (14-19 November, 2022). Semi-finished steel prices fluctuated in the range of INR 200-1,700/tonne (t). However, the government's rollback of export duty today on steel and steelmaking raw materials had an immediate impact: prices of semi-finished and finished long steel witnessed an uptrend in most markets.

Domestic induction furnace finished long steel offers remained volatile. Offers varied in the range of INR 400- 2,300/t w-o-w. The trade reference prices of finished flats edged down by INR 100-1,400/t.

Iron ore and pellets

• SteelMint's bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 7,600/tonne (t), stable compared to the last assessment on 15 November, 2022. Trades remained muted on continuous bid-offer disparities and the sharp drop in sponge iron prices. However with roll back of export duties on pellets and low grade iron ore, the players have today increased offers by INR 1,000/t.
  
  
• Vedanta conducted an auction for 20,000 t of iron ore lumps (Fe58.25%) from its A. Narrain mines in Karnataka's Chitradurga district on 18 November. The steelmaker received bids for the entire quantity at INR 3,219/t against the floor price of INR 3,179/t. Prices are exclusive of royalty, DMF, and NMET charges.
  
  
• NMDC conducted an auction for 600,000 t of iron ore from its Donimalai mines in Karnataka on 17 November. According to sources, the entire material was sold at the floor price. 200,000 t of lumps (10-40mm, Fe 61%) were booked at INR 2,497/t. 400,000 t of fines (Fe 59%) were booked at INR 1,809/t. All prices exclude royalty, DMF, and NMET charges.
  
  
• Odisha Mining Corporation (OMC) conducted an iron ore auction (0.75 mnt of fines and 0.65 mnt of lumps) on 16 November. According to market sources, nearly 16,000 t of fines and 194,000 t lumps has been booked while the remaining lots were unsold. OMC produced 27 mnt of iron ore in FY22 compared to 13.06 mnt in FY21.
  
  

Coal

• Portside RB3 (4800 kcal/kg NAR) grade coal prices fell by INR 1,000/t w-o-w to INR 12,900/t amid small parcel bookings by sponge iron manufacturers.
  
  
• High-CV RB1 (6000 kcal/kg NAR) grade coal prices, however, witnessed a $10/t w-o-w rise to $196/t FOB as the force majeure on the key rail lines to RBCT Port remains in place.
  
  
• Australian hard coking coal prices fell by $40/t w-o-w to $260/t FOB and $277/t CNF India. Oversupply concerns and slow demand in market have pushed prices downward.
  
  

Ferrous scrap

• India's scrap market remained sluggish. Imported scrap prices are fell for yet another week due to the drop in demand and sales in the market. Buyers are on wait-and-watch mode for further fall in prices. Bookings are slow and limited deals were concluded this week at $418/t for Europe-origin shredded.
  
  
• Meanwhile, the domestic market is weak and imported scrap bookings ahve paused. The government's rollback of export duty on steel and steel raw materials is likely to have a significant impact on domestic prices.
  
  
• SteelMint's assessment of Europe-origin shredded scrap offers into India were at $415/t CFR Nhava Sheva, down $8-10/t w-o-w.
  
  

Ferro alloys

• According to SteelMint's assessment on 18 November, Indian silico manganese prices were 5% down w-o-w to INR 72,700/t ex-Durgapur, down 2% to INR 73,000/t ex-Vizag, and down 3% w-o-w to INR 73,500/t ex-Raipur. Silicon manganese prices were falling due to the decline in downstream steel market demand.
  
  
• As on 18 November, Indian ferro manganese prices dropped marginally around 1% w-o-w to INR 75,700/t ex-Durgapur and ex-Raipur at INR 75,000/t. Last week, demand for stainless steel and special steels halted despite some minor price drops in ferromanganese.
  
  
• According to SteelMint's assessment on 17 November, smelters were offering around INR 99,000-100,000/t exw Jajpur, a sharp drop of around INR 5,250/t w-o-w as producers were forced to lower their offers in order to close deals this week despite high production costs.
  
  
• Indian ferro silicon prices fell as a result of weak demand at higher prices. On 18 November, Guwahati-based producers were offering ferro silicon Si-70% grade at INR 122,000/tonnes(t)-exw, down 2.4% from INR 125,000/t the previous week, according to SteelMint's assessment. Bhutan's offers remained nearly constant at INR 125,000/t exw.
  
  

Semi finished

On a weekly basis, domestic sponge iron prices increased by INR 200-1700/t across regions and the major rise in prices was reported in Raigarh and Durgapur by INR 1,200-1,700/t. The billet market saw prices dropping in the range of INR 500-1,200/t on fluctuating demand.

However, towards the weekend, prices of semis started to rebound as buyers/stockists started to take positions anticipating that the price will remain supportive.

• Vizag Steel has floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP) on FOB ST delivery against 100% payment terms. The due date of the tender is 25 November.
  
  
• Sponge iron export price assessment dropped by $30/t, w-o-w, to $400/t CPT Nepal, (FeM 80%, lumps 70%, fines 30%). About 8,000 t of deals were concluded this week.
  
  
• SAIL's Rourkela Steel Plant concluded a 1,500 t of steel grade pig iron auction on 17th Nov. The average bid price stood at INR 38,475/t exw, as per latest reports
  
  
• Tata Steel subsidiary Neelachal Ispat Nigam Limited (NINL) will conduct an auction for around 7,000 t of pooled iron fines from its Kalinganagar plant in Odisha on 18 November.
  
  
• Durgapur Steel Plant (SAIL) auction for 2,500 t of steel grade pig iron on 15 November failed to attract participation. The reserve price for the auction was at INR 39,750/t exw.
  
  

Finished longs

India's finished long steel market of the induction furnace route observed a subdued buying enquiries throughout the week impacted lower in trades and lesser counter sale as noticed across regions. Constant dropped in raw material (sponge iron and billet) prices seen and sluggish demand in rebar, structural steel along with wire rod. Buyers approaching wait and watch mode and inactive to place new orders as observed. Rising inventories in the mills putted selling pressure on suppliers, such factors led pushed manufacturers to decline their offers or giving healthy trade discounts depending on booking orders. On the other hand, the government rolled back export duties on 18 November on steel and steelmaking raw materials. Thus steel prices increased today.

• On a weekly basis, rebar steel prices increased by INR 400-2,300/t in most of the markets except in few markets of Northern region down by INR 900-1,100/t as per 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 49,000-49,400/t exw Raipur, INR 54,200-54,700/t exw Jalna.
  
  
• Trade discount given by Raipur- based heavy structural steel manufacturers is stood at around INR 1,000/t and trade reference price of 200 mm angles stood at INR 54,900-55,400/t exw Raipur.
  
  
• Trade discounts in wire rod given by Raipur based steel wire rod resellers is around INR 1,000/t and trade reference price at INR 48,700-49,200/t exw Raipur, size 5.5 mm and Durgapur reference price at INR  48000/t exw.
  
  
•  BF Route-Rebar prices continued to follow downward trend across various markets due low buying activity amid weak demand. Current week's assessment for rebar (12-32 mm, BF-route, IS 1786, Fe500D) fell by INR 400/t w-o-w to INR 55,000-56,000/t exy-Mumbai, excluding GST @ 18%
  
  

Finished Flat

• Trade-level prices of flat steel products have dropped in most of the markets under assessment as per SteelMint data. However, the HRC (IS2062, 2.5-8mm) and plate (E250, 5-10mm) prices have remained unchanged for the second week in a row.
  
  
• Need-based procurement by end-industrial buyers in the traders' market has weighed on the prices this week. Other than this various issues on the global trade platform has also had a bearing on the buying interest of domestic buyers. For instance, cheaper alternatives on the global market, decline in the export prices, and limited overseas buying interest have been major concerns over the past few months.
  
  
• Late in the evening yesterday, Indian government has removed the 15% export duty levied on 21 May'22 clad or plated non-alloyed flat steel products. This is going to bring out fresh offers from Indian steel majors. Indian mills had withdrawn HRC export offers to major importing countries like Vietnam, UAE and Europe, this week. SteelMint's HRC (SAE1006) export index stood unchanged w-o-w at $518/t FOB east coast. It is expected that mills are likely to announce a fresh round of offers for non-alloyed HRC for the overseas markets in the coming week.