This week domestic HR plate prices softened on limited trade inquiries and dull demand among traders. Trade sources shared with SteelMint that they are hesitant to purchase the material at higher prices. However on the other hand mills raised prices by around INR 1000/t in first week of Jan’21
Currently, SteelMint’s benchmark assessment for the HR-plate (IS 2062) stands at INR 55,000-56,000/t exy-Mumbai, down by INR 500/t w-o-w. Price is exclusive of GST @ 18%.
Trade sentiments soften due to:
1.OEMs are holding fresh procurements
At present, OEM’s are putting on hold their procurements. One of the major plate procurement mill is buying material as per project requirement. For all other projects they have deferred the procurement of HRC coils.
2.Auto industry woes
In the commercial vehicle (CV) segment, the LCV, MCV and HCV registrations have reported an annual decline by 11%, 16% and 27% respectively in Dec ’20, according to the FADA’s press release. Further, FADA quoted, “Government’s approval for INR 12,000 crore infrastructure projects will see its positive effects in the CV space, though full recovery is only expected in all the segments of the industry from April ‘21 onwards”. This might delay plate demand from this segment.
3.Substitution products-
The steel drum and barrel customers have switched to other alternatives amid surging steel prices in the recent past, SteelMint reliably learned from its credible sources. Producers have been concerned about the steel prices and side-lined themselves to need based procurement, weighing further on the demand.
Outlook
Trade prices will soften further on limited buying. Further hike in prices seems difficult to absorb in the domestic market and this may hurt the market sentiments.
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