India: Mills announce interim HRC-CRC price hikes; trade-level tags stay range-bound

Several prominent producers of hot-rolled (HR) and cold-rolled (CR) coils in India have declared an interim price increase of INR 500/t ($600/t) for late April 2024 sales. This move comes against a backdrop of fluctuating market trends and mixed sentiments within the industry.

Following the announcement, the list prices set by mills for HRCs (IS2062, E-250, 2.5-8mm) and CRCs (IS513, Gr-O, 0.9mm) for end-April 2024 sales stood at INR 53,500-54,000/t ($642-648/t) and INR 58,800-60,500/t ($706-726/t) respectively, excluding GST at 18%. However, the list price levels from certain private mills remained undisclosed.

Meanwhile, BigMint's benchmark assessment for HRCs ranged between INR 53,000-54,000/t ($636-648), while CRCs hovered around INR 60,500-61,500/t ($726-738). These price levels stand range-bound against the previous assessment carried out on 19 April. The prices mentioned above are on an exy-Mumbai basis for cut-to-length (CTL) form and exclude GST at 18%.

Concurrently, the weekly assessed prices of hot-rolled plates (IS2062, Gr E250, 20-40mm) edged up by INR 300/t ($4/t), to reach INR 57,400/t ($689/t) within the broader range of INR 56,000-60,000/t ($672-720/t) exy-Mumbai, excluding 18% GST.

Market updates

1. Maintenance shutdown at HSMs in April 2024: Indian mills have temporarily halted exporting HRCs to Southeast Asia and the Middle East due to maintenance runs at their hot strip mills (HSMs) which impacted output from the same. A few mills took up a 15-day long maintenance in April 2024 at one of their HSMs, while one of the private mills opted for the same at one of its cold rolling mills (CRMs). The mills planned this strategically to counter the low buying interest in both domestic and overseas markets, informed a few industry sources.

One of the major private producers is likely to take up a maintenance shutdown at its HSM soon, or may delay it until the first week of May 2024, revealed market sources.

2. Export, import trends: India's exports of bulk HRCs and plates are slowing down as per recent vessel line-up data maintained with BigMint. On the other hand, imports continue to edge closer to the previous month's level.

The concerns around geo-political tension in the Mediterranean Sea region and slow end-user consumption have led to cautiousness among distributors and spot buyers, who are opting for smaller, more frequent purchases to minimize price risks in the European Union (EU). Indian mills are holding off on exporting to the region, with price indications for HRCs (S275, 3mm) at $625-635/t CFR Antwerp.

On similar lines, the weekly assessment for BigMint's HRC (SAE1006) export index stood unchanged at $560/t FOB east coast, which is focused on offers to the Middle East (ME) and Vietnamese markets. This indicates that mills are prioritizing the domestic market over exports based on the realisations and supply constraints emerging out of the strategic maintenance shutdowns.

3. Need-based procurement in domestic market: The domestic traders' market reflects a trend of need-based procurement, with buyers making smaller, immediate purchases based on specific requirements. Distributors are increasing their offers citing supply constraints, albeit facing resistance from buyers seeking to negotiate lower prices.

"Demand has not improved much in the traders' market segment. End-industrial buyers continue to purchase in smaller quantities and push for lower prices. However, sellers are attempting to raise offers," observed a market participant.

"Mills have implemented interim price increases, and rumours suggest further hikes are possible next month. This aggressive pricing strategy could raise concerns, as it might incentivize a return of import activity," a distributor highlighted.

Near-term outlook

In the near term, market prices are expected to remain stable, supported by consistent domestic price levels and concerns over global trade conditions. However, there are apprehensions regarding a surge in imports as domestic mills are looking forwards to further price hikes for May 2024 sales.