Indian HR-plate prices fall after 2 firm weeks on low buying

Hot-rolled (HR)- plate prices in the domestic markets witnessed a decline this week after remaining elevated for two consecutive weeks. Higher spot market prices and the reluctance of sellers to lower their rates weighed on the buying interest and pulled down the prices.

However, at the beginning of the month, mills had announced an increase of around INR 3,000/tonne (t) in their HR-plate list prices for Jun '21.

As of week 25, SteelMint's benchmark assessment for HR-plates (IS-2062/E350) of 5-10 mm thickness dropped to INR 66,500-67,500/tonne (t) ($896-909) exy-Mumbai as against INR 67,000-68,000/t ($916-930) exy-Mumbai a week back. Prices are exclusive of GST @ 18%.

"The demand from the end-user segment continues to remain low over the past couple of weeks which has weighed on the spot market prices.," said shared a western-India based trader.

On the other hand, mills are being bullish about resumption in demand with the beginning of the July-Sept '21 quarter. “Demand for HR-plates is lower but visibility is there. OEMs and fabricators have deferred their procurements. As the prices have softened now, they should be closing the orders by end June- early July," said a manufacturer.

Market sentiments and prices are disrupted due to the following reasons:

1. Arrival of monsoon sees a slump in construction demand- Activities from infra-and-construction sectors are poised to go down as monsoon rains hinder the logistics and on-site working.

2. Unorganised sector and end-user demand reels under high prices- Plate consumers in the unorganised and end-user segment continue to remain on the sidelines owing to the higher prices. On a monthly basis, average HR-plate prices have seen a jump of INR 6,200/t from INR 60,300/t levels at the beginning of Apr ’21 to INR 66,500/t in May ’21. This gap further increased by INR 1,000/t to take the prices to INR 67,500 at the beginning of Jun ’21. All the prices mentioned are on an exy-Mumbai basis, exclusive of GST @ 18%.

3. Gap between domestic price and Chinese export offer narrows- The gap between Indian domestic plate price and Chinese heavy plates export offer was about $140/t around mid-May ’21 which has narrowed to $4-21/t at present.

Currently, the Chinese HR-plate offer stands at $900-930/t FoB China, against $910-930/t FoB basis a week ago. Slow demand from the Covid-19 stricken South East Asian countries alongside anticipations of a further cut in prices amongst buyers is pulling down offers.

Will prices firm up in the near term?

Steelmakers are optimistic of revival in demand from the OEMs, wind towers, infrastructure and fabricators segments from late July-Aug ’21 onwards. This view is making them bullish on prices too. However, the end-user demand is quite slow even as the Covid-19 case counts are easing.

Thus, it would be interesting to see how the retail segment prices move in the near future.