India: Trade-level HRC, CRC prices fall by INR 300-600/t w-o-w; market braces for festive week

Trade-level hot-rolled (HR) and cold-rolled (CR) coil prices have edged down by INR 300-600/t ($4-7/t) in the key markets of Mumbai and Faridabad. Trade activities have stayed low due to upcoming festive week spanning 13-18 November, followed by the elections in a few regions. However, distributors have started quoting a little higher in a few non-key regions despite modest market sentiments and activity levels.

SteelMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) edged down by INR 600/t ($7/t) to INR 55,300/t ($664/t) as against last week's levels. Similarly, CRC (IS513, Gr O, 0.9mm) prices also inched down by INR 300/t ($4/t) to INR 62,800/t ($755/t) in this period. (INR 1 = USD 0.012015 ; USD 1 = INR 83.229)

Market updates:

1. Cautious domestic buyers: Domestic buyers are quite cautious about buying in bulk volumes, whereas availability of cheaper import alternatives in the market have humbled down the steeper fluctuations in trade-level prices. "Buyers have continued to show a restraint towards booking in bulk and have maintained a hand-to-mouth pattern of procurement over the past month. Its expected that the prices are likely to show moderate movement in the upcoming couple of weeks post-holiday period," said a major distributor from the north. Rumors are that after Diwali even the mills are going provide some price support, he added.

Trade market prices have fluctuated in a narrow band of up to INR 1,000/t ($12/t) per week in the couple of assessments since the beginning of the month. This has come as a result of mills' announcing a rollover of November month sales list prices against those towards end October. However, price levels have not been confirmed by most of the manufacturers, and SteelMint is working towards it.

A total of 5,26,907 tonnes (t) of HRCs and plates were imported into India in October 2023 (provisional) an increase of 124% over the previous month of 2,35,240t, as per the bulk vessel line-up data maintained with SteelMint. This is the highest import volume in this calendar year.

2) The finished flat steel consumption increases: In October 2023, the consumption stood at around 11.60 million tonnes (mnt), registering a 5% increase from 11.06 mnt a month ago. However, it is still the second-highest volume in the current fiscal, after the 11.22 mnt reported in August. The consumption was on higher side despite the usual off season period of monsoon. The higher consumption can be attributed to the upcoming elections and festival which have increased consumption in infrastructure and housing projects, that had expedited their activities to close targets.

3) Indian mills continue to hold HRC export offers: Indian steel mills are prioritizing domestic sales of HRC due to higher domestic prices. Despite improving Chinese prices, Indian mills are refraining from exports as domestic realizations remain more attractive. Additionally, weak market demand in the Southeast Asia, EU and ME further discourages Indian mills from pursuing export opportunities.

Outlook

The market prices are opined to show slight fluctuations in the near term considering decent level of material availability in the lower blocks of the distribution network. With India becoming a net importer of finished steel, government might take certain steps to aid the domestic market and control the inflow of finished steel.