The current domestic trade segment prices of HR plates have remained range-bound as of week 21 of CY ’21. A decline in market activities due to supply chain disruptions is a major challenge being faced by traders.
SteelMint’s benchmark assessment for HR-plate (IS-2062/E350) of 5-10 mm continues to be at INR 66,000-67,000/t(exy-Mumbai). Prices are exclusive of GST @ 18%.
A market source said,”There is a likelihood of demand remaining high in the coming months. This sentiment is keeping prices supported even during these trying times when there is very limited demand. Demand from the shipbuilding, oil and gas, and infrastructure segment is poised to remain strong and activities shall pick up with the easing of lockdowns.”
Projects driving domestic demand for HR plates:-
1.Highway construction to gather pace in southern India–
a)Dilip Buildcon (DBL) has executed concession agreements for four wholly-owned subsidiaries with the National Highways Authority of India (NHAI). Concession agreement has been granted for the following scope of work under hybrid annuity mode (HAM) under Phase-I of Bharatmala Pariyojana in Karnataka-
- Bangalore Malur Highway-four-laning of the stretch of 26.4 km of Bangalore Chennai Expressway along with an additional 0.7km towards the intersection of NH 207 and NH-4. This is the project’s Package-I with a bid cost of INR 1,160 crore.
- Malur Bangarpet Highway-The Package-II spans from 26.400 km to 53.500 km (27.1 km) of Malur to Bangarpet Section. This section, too, will be developed as a four-lane road with bid cost of INR 1,279 crore.
2.Focus on growing Metro Rail demand-
a)Tata Projects has received a INR 2,000 crore order from Chennai Metro Rail (CMRL) for the Phase 2/Corridor 3 between Venugopal Nagar to Kellys Station. The work involves:
- Construction of 9 km twin bored tunnels, totalling 18-km from TBM retrieval shaft.
- Construction of diaphragm walls of station box, entry and exit structures and launching and retrieval shafts for stations at Madhavaram Milk Colony, Murari Hospital, Ayanavaram and Purasaiwakkam High Road Stations. The work completion time is estimated to be four years.
b)Hindustan Construction Company (HCC), in a joint venture with KEC International Ltd (KEC), has been awarded an INR 1,147-crore contract by Chennai Metro Rail Ltd.
- Construction of 7.95 km elevated viaduct section.
- Construction of nine elevated stations on Corridor 4 of phase II of the Chennai Metro. Estimated time of completion is about 3 years.
c)Infrastructure company Larsen & Toubro (L&T) recently has bagged contracts estimated at around INR 2,500-5,000 crore from Chennai Metro Rail Corporation (CMRC).
- Construction of nearly 12 km twin bored tunnels from Kellys station to Taramani Road Junction station.
- Another contract for approximately 8 km of elevated viaduct with 9 elevated metro stations starting from Power House to Porur Junction.
- Entry-exit structures and launching and retrieval shafts at Chetpet Metro, Royapettah Govt. Hospital, Thiruvanmiyur metro stations.
Near term outlook-
Global HR-plate export offers to support domestic prices:
The global prices of HR plates have been gaining traction from the export rebate cut jitters since Feb ’21. Further, with the removal of 13% export rebate by the Chinese government early this month, the prices have continued on the upward trajectory, hitting new highs with each passing week.
The current week’s assessed offers for Chinese heavy plates stand around $1,020-1,045/t FoB China as against $920-1,035/t FoB basis a week ago.
Thus, domestic demand is expected to stay strong.
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