The domestic HR-plate prices have continued to fall for the fourth consecutive week on bearish sentiments prevailing in the domestic market. Sluggish demand and limited buying inquiries continue to pull down plate prices.
SteelMint’s benchmark assessment for the HR-plate (IS 2062, E350) for 5-10mm stands at INR 52,500-53,500/t exy-Mumbai, down by INR 1,500/t w-o-w. Price is exclusive of GST @ 18%.
“Demand continues to remain slow from the construction, OEM and project sectors, but we are hopeful that it should pick up in 3 months’ time,” a major plate producer shared with SteelMint.
While a trader from Northern India shared, “The demand remains weak on account of disruption caused by the recent ‘Farmers’ Strike’. Demand from the neighbouring states like Uttar Pradesh, Rajasthan and Haryana is highly impacted due to this.”
SteelMint observed the following factors behind the decline in prices-
1. Slow procurement from projects- The procurement from projects has slowed down as the prices are being elevated by the mills and OEM’s are feeling the pinch of higher prices.
Requirements are being received only from projects of critical nature or those that are near completion, however, for non-critical projects, the procurement has been deferred in anticipation of further correction in prices.
2. Decline in global prices- The continual decline in global plate prices for the past four weeks has further dampened the market sentiments. The current week offers for Chinese heavy-plate (SS400, 5-10mm) stands at 630-635/t FoB China, down by $5/t as against $630-640/t FoB basis a week back. The early exit of market participants and easing out inventories ahead of Chinese Lunar New Year holidays weighed on heavy plate export offers.
3. Traders remain cautious- Traders have adopted a wait and watch mode and are observing the market in absence of price clarity. On one hand, mills are raising prices and on other prices are difficult to absorb in the market. Thus, the trade segment is expecting further fall in offers and also procuring material cautiously.
What may happen?
On questioning about the outlook, a reliable trade participant shared, “It would be interesting to see how the prices move in the near term with declining trade segment prices while mills keep on announcing hikes in list prices in anticipation of a pick-up in demand in upcoming months.”
SteelMint expects prices to remain under pressure in upcoming weeks on lower trade activities and sluggish demand.
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