India: Mills revise HR plate prices for early-September sales; trade prices hit 1.5-year low

Private Indian plate producers have reduced their prices for early-September sales compared with prices prevailing in early-August. The prices announced for E250, 20-40mm plates stand at INR 61,500-62,000/t exy-Mumbai compared to INR 62,500-63,000/t in August.

Trade market prices of HR-plates (5-10mm, E250) have hit a 1.5-year low. SteelMint’s weekly assessment for HR plates (E250, 5-10mm) stand at around INR 56,000-57,000/t exy-Mumbai. Similar levels were last seen in April 2021.

Furthermore, prices have dropped by about INR 4,500/t from the levels of INR 60,500-61,500/t exy-Mumbai assessed in the first week of August.

Also, plates (E250, 20-40mm) prices were assessed at INR 59,000-60,000/t exy-Mumbai this week. Prices are basic, and exclude GST at 18%.

Major factors impacting market sentiments

1. Raw material prices
Raw material prices have been on a downward trend. For instance, SteelMint's Odisha iron ore fines (0-10mm, Fe 63%) index dropped from INR 3,880/t in July to INR 3,760/t in August. These prices are on ex-mines basis and includes royalty and other statutory cesses. Moreover, other raw material prices, too, remained volatile weighing down on buyers' interest for current plate prices.

2. Decline in global plate prices
Domestic buyers are also keeping tabs on global plate prices, another factor that is impacting buying interest. Monthly average Chinese heavy plate (SS400) export offers have declined further by about $37/t to $638/t FOB in August as against the previous month's $675/t FOB. Limited buying interest globally and volatility in the futures market kept weighing on Chinese export offers.

3. Demand and supply
Indian steel majors tried adjusting to slow demand over the past few months by opting for maintenance shutdowns ahead of their normal schedules. It did have an impact on the decline in prices which were shallow in August as compared with the period between April to July.

Buying has improved moving into August but the buyers continued to bargain despite supply side disruptions. "Lower prices compared with those in the last three months boosted buying interest as was witnessed in in August," informed a distributor source based in north India. However, festivities and holidays in the latter half of August kept the market muted.

Meanwhile, supplies of plates with thickness above 12mm have improved. Still there is limited supply of plates that are over 60mm thick, SteelMint learnt from sources.

Near-term outlook
Trade activities are likely to increase ahead of the Dussehra and Diwali festive holidays. Meanwhile, trade participants are also cautious about the price levels anticipating supplies to improve in the coming weeks as most of the producers are resuming operations after scheduled maintenance shutdown.