Major plate producers in the country are now announcing either discounts or a reduction in list prices after factoring the low buying interest among auto and trade segment participants.
1. AM/NS India has announced a reduction of INR 2,500/t in HR plate prices for March deliveries. Effective list price stands around INR 51,000-51,500/t (exy-Mumbai).
2. SAIL, the government-owned steel mill is offering discount/rebates of around INR 2000-2,500/t Mar’21 deliveries.
On the other hand, trade segment prices have remained range-bound. SteelMint’s benchmark assessment for the HR-plate (IS 2062/E350) for 5-10mm continues to hover at INR 53,000-53,500/t exy-Mumbai. Price is exclusive of GST @ 18%.
SteelMint analyses a few factors on correction in plate prices:
a. Dull demand in the trade market- Demand for plates has remained sluggish since mid-Feb’21 with higher inventories amongst distributors and stockiest. Further, OEMs are hesitant regarding procurement in anticipation of further decline in prices. Thus, slow demand is keeping plate prices under pressure.
b. Slow buying in the construction sector- Several projects were announced in the construction and infrastructure sector but requirements of critical nature are only being booked. “In the construction industry, the demand has not come full-fledged, but slowly its improving,” SteelMint understands from its market channels.
c. Oil and gas industry also wary of high prices- Oil and gas companies are major consumers of pipe and tubes. Soaring prices in the past few months have led to an increase in the cost of projects. This in turn has made the industry participants to stay on the side-lines and wait for prices to normalize.
China’s HR plate export offers- On the other hand, Chinese mills have increased the range of HR plate export offers by around $5/t w-o-w basis. Current offers are hovering in the range of $685-695/t FoB China. Last week the offers were in the range of $685-690/t FoB basis. Export offers are expected to remain on the higher side due to uncertainty on export rebate cuts.
Outlook- Domestic HR plate prices are expected to remain under pressure in the medium-term on slow demand. On asking about the trend in plates prices a credible market source shared, “although the demand is expected to remain slow for some more time, higher prices in the global market may not lead to steep correction in the domestic market prices.”
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