The domestic HR-plate price continues to soar after the major plate producing mills announced the second round of hike in their list prices amid supply constraints and rising raw material costs.
Effective price hikes-
- SAIL- announced a further hike of INR 1,500/t in plates, effective price stands around INR 48,300/t exy-Mumbai.
- JSPL- is likely to announce second round of hike by 15th Dec ’20 with estimated hike quantum of INR 1,500/t. Revised offers will stand at around INR 50,500/t exy-Mumbai.
- The mentioned prices are exclusive of GST @ 18%.
On the other hand, SteelMint’s benchmark assessment for the HR-plate stands at INR 52,000-52,500/t exy-Mumbai, soaring up by INR 2,500/t for the second consecutive week. Price is exclusive of GST @ 18%.
Last week, major plates producing mills had announced an increase of about INR 2,000-2,500/t ($27-34) in their list prices for Dec ’20.
Factors driving the rally in HR-plate prices-
1. Hike in global plate prices- Improved domestic demand in China along with that in the overseas markets has led to a continual ascension of heavy plate export offers which stands at $570-575/t FoB China basis this week. The prices have rallied for five consecutive weeks.
2. Increase in cost of production – The cost of production has also gone up with the increase in iron ore prices. India’s state-owned iron ore miner – National Mineral Development Corporation (NMDC) has announced the price of hike in iron ore for Dec ’20. Prices have increased further by 14% for its Chhattisgarh based mines. Last month NMDC increased iron ore prices twice.
3.Construction and infrastructure demand started to recover– With the conclusion of the festive season, construction and infrastructure sectors are going to see increased activities. Increase in inquiries from this sector with easing of migrant labor problem has resulted in improved buying.
As per market reports, Tata Steel is introducing Nest-In through its range of steel-based modular construction solutions. Nest-In is leading the prefabricated construction space in India today, Nest-In today serves over 26 states in India along with its large network of solution partners for last mile access.
Outlook- The trade market sources anticipate the domestic plate prices to remain at higher levels in the near term with increased demand from the shipbuilding and construction industry. Auto and engineering sectors are perceived to continue on the growth trajectory in the upcoming quarter.
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