India:
There were generally positive developments in India's iron and steel sector. There have been significant increases in imports and exports, and it has been announced that production will be increased in some products. These important developments are expected to improve stagnant prices. However, the iron ore export tax, which has been on the agenda recently, and the calls by sponge iron producers may lead to different results on the iron ore basis. The Federation of Indian Mineral Industries (FIMI) has warned that production could fall if exports are banned or subjected to customs duty.
According to the latest data shared by SteelRadar, India's θ12-32 mm rebar prices were set at $555-$560 last week. Iron ore prices have been stable at $110 since March 17. Scrap prices were similarly in a range of $370-$374 with slight fluctuations.
Indian steel pipes manufacturer Welspun Corp has announced the mutual termination of a contract worth 3.39 billion rupees with Saudi Arabia's Aramco. The contract was facilitated through Welspun's associate firm, East Pipes Integrated Company for Industry. Awarded in January for an eight-month duration, the contract constituted approximately 3% of Aramco's total contracts with Welspun for the fiscal year 2023-24, which amounted to about 98 billion rupees. Although the reason for termination has not been disclosed, Welspun has assured that it will not impact its operational plans.
Several major Indian steel plants, including JSW Steel and Tata Steel, are projected to make significant investments to expand their production capacity in response to the growing domestic demand. India, being one of the world's fastest-growing economies, has prompted this move.
According to the report, these leading steel manufacturers are expected to increase their production capacity by 2.2 million tons in the fiscal year starting April 2024. Among them, Jindal Steel and Power are forecasted to boost their capacity by 6 million metric tons from the current level of around 9.6 million metric tons. Tata Steel plans to add 5 million tons to its existing capacity of 21 million tons. JSW Steel aims to raise its capacity from 27.5 million tons to 38.5 million tons in the 2024-25 fiscal year.
China:
The price of Q235 150mm square billet in Tangshan, China's largest steel production hub, rebounded by Yuan 100/tonne ($13.9/t) to reach 3,410/t EXW including the 13% VAT as of March 24. This increase was supported by the upward trend in Chinese rebar futures prices, boosting market sentiment.
Higher sales of finished steel prompted re-rollers in Tangshan to actively purchase semis for replenishment. Daily billet consumption among the 48 re-rollers rose by 17,300 tonnes/day on week to average 58,200 t/d over March 14-20, with capacity utilization and operational rates increasing accordingly.
However, billet stocks at re-rollers' yards surged by 50,200 tonnes on week to reach 420,200 tonnes as of March 20 due to increased buying activity. In contrast, billet stocks in retail warehouses declined, with total inventories across commercial warehouses and ports in Tangshan decreasing by 76,500 tonnes on week to a two-month low of 1.3 million tonnes by March 21.
On the supply side, daily billet production among the 24 steelmakers in Tangshan remained largely stable at 37,000 t/d on average over March 15-21, with a slight decrease of 200 t/d. Additionally, the average loss incurred by the ten integrated mills on billet sales decreased significantly by Yuan 156/t on week to Yuan 71/t by March 22, attributed to lower production costs and rising billet prices.
The average production costs borne by mills for billet production dropped by Yuan 86/t on week to Yuan 3,481/t including the 13% VAT last week.
Analysts anticipate a decline in China's crude steel output for March compared to the previous year, attributing it to mills delaying restarts or undergoing maintenance post the February Lunar New Year holiday due to lackluster demand. March, typically a period of strong demand as construction season begins, is expected to see a significant decrease in output. Forecasts suggest a 12.6% drop according to consultancy Lenge Steel and an 11.21% decline as per China Futures, compared to last year's 95.73 million metric tons. Despite the projected decrease, China's crude steel production in the first two months of the year stood at 167.96 million tons, a 1.6% increase year-on-year, contrary to expectations of a decline.
According to data from the China Iron and Steel Association, in mid-March, the daily average pig iron output from China's main steel manufacturers was approximately 1.84 million tons. This marked a decrease of 0.41% compared to early March and a significant decline of 6.56% year-on-year.
Meanwhile, the daily average crude steel production stood at about 2.05 million tons, showing a decrease of 0.51% compared to early March. Conversely, steel products' production increased slightly by 1.95% compared to early March, reaching approximately 1.97 million tons.
Steel inventories in mid-March experienced a slight increase of 0.05% from early March, reaching about 19.53 million tons. However, compared to the same period last year, inventories grew by 3.04%.
Vietnam:
The HRC import market in Vietnam has declined due to falling Chinese steel prices, leading to reduced trading activities. There's uncertainty about future market conditions, with some anticipating further price drops. Chinese offers for SAE 1006 HRC hover around $570/ton CFR Vietnam, with lower prices available for stock lots. Formosa Ha Tinh reduced its monthly list prices for SAE 1006 HRC to $593-600/t CFR Vietnam, but buyers find these prices high.
The Chinese HRC market has been sluggish, with minimal trading reported, and prices for Q235B HRC and SAE quality HRC decreased. The domestic steel billet market in Vietnam experienced a rapid decline, with prices dropping significantly, surpassing the global market decline. Factory gate prices for billets range from 11.9 to 12.1 million VND/ton ($481-489) depending on the region.
Domestic scrap prices sharply declined, with discounts offered by factories, leading to a decrease ranging from 100,000 to 200,000 VND/ton ($4-8) in March. High-quality scrap steel prices range from 9.2 to 9.35 million VND/ton ($372-378) in the Northern region and from 8.6 to 8.9 million VND/ton ($347-359) in the Southern region as of March 15th.
Taiwan:
Feng Hsin Steel Co., Ltd., a Taiwan-based company announced its prices for the current week. Rebar, scrap, and section steel prices remained unchanged at NT$19,200/ton, NT$10,500/ton, and NT$26,700/ton, respectively. Feng Hsin noted that there were no quoted prices for scrap shipments from the US last week. However, the prices for Japan's H2 scrap rose to US$365/ton, and US containerized scrap increased to US$355/ton. Additionally, Australian iron ore prices surged from US$101/ton to US$108.8/ton.
This week, Walsin Lihwa and Yieh Hsing in Taiwan are set to unveil their April rates for stainless steel wire rods. As per a statement from stainless steel screw manufacturers, the present market demand is subdued, prompting industry players to implement strategies to minimize inventory and postpone procurement plans. Consequently, Taiwanese stainless steel wire rod mills are exercising caution regarding setting new rates, expressing concerns that purchasing activity might be impacted.
Last week, Taiwanese mills capitalized on an improved domestic rebar market by placing a substantial order for Russian billet. Approximately 100,000 tonnes of 3sp 150mm square billet from a specific Russian mill were booked at a base price of $500/tonne CFR Taiwan for May/June shipment. The deal primarily involved vanadium-added billet, with additional costs of $22/t for 0.02% V and $27/t for 0.03% V. While sourcing these billet grades from China is feasible, Russian-origin prices are typically more competitive. However, recent pricing trends have made Chinese prices comparable to Russian prices, particularly for vanadium-added billet. The buoyancy in the rebar market in Taiwan, coupled with low rebar inventories, drove the decision to make the purchase. Additionally, an anticipated hike in electricity tariffs next month, expected to increase steelmaking costs in Taiwan, may have further incentivized the buying activity.
Following a sharp decline in Vietnam's hot rolled coil import market last week, there was a recovery this week. However, Vietnamese buyers continue to tread cautiously due to price fluctuations. Offer prices from China increased in line with the recovery on the Shanghai Futures Exchange, but buyers still anticipate lower prices, aiming for prices below $530/tonne CFR for Q235B hot rolled coil.
Despite Formosa Ha Tinh Steel lowering its domestic hot rolled coil prices, buyers perceive prices to still exceed expectations, leading to hesitation in making large purchases. The market remains subdued, with uncertainties and cautious buyer approaches expected to determine the market's direction in the coming weeks. SAE quality hot rolled coil with a thickness of 2-2.7 mm was evaluated at $565/tonne CFR Vietnam, reflecting a weekly decrease of $2.5.
Singapore:
On the Singapore Exchange, Premium Coking Coal Futures for April settled at $248/t FOB on Friday, declining $6/t from the previous week's settlement price of $254/t FOB.
The coking coal market is currently bearish due to poor demand, according to Singapore-based traders. Sentiment remains weak amidst the 6th round of Chinese coke price reductions agreed upon during the week. However, one trader believes the market could stabilize as some traders seek to build positions at current levels following recent price corrections.
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