The persistent low buying interest and bearish sentiments in the domestic market weighed on the trade segment prices of HR plates this week, leading to a correction of around INR 1,300/tonne (t).
For week 28, SteelMint’s benchmark assessment for HR plates (IS-2062/E250) of 5-10 mm thickness declined by INR 1,300/t to INR 64,000-65,000/t ($859-872), exy-Mumbai, compared to last week’s prices of INR 65,800/t. Prices are exclusive of GST @18%.
“Demand is moving into a slowdown phase. With the arrival of monsoon, sectors like construction, pre-engineered buildings (PEB), and heavy engineering (HE), aggregating 16-20% of plates consumption, are witnessing a gradual halt in activities. This has led to the recent dip in trades which have been persistently low since the beginning of CY ’21,”said major Mumbai-based trader.
There are other factors impacting market sentiments too.
- Automobile sector starts at a slow pace: Recovery from the auto-segment has remained slow post the easing of lockdowns across the country. Demand from auto giants had dropped owing to the closure of dealerships and showrooms since the outbreak of the second wave of Covid-19 in mid-March. On a positive note, the farm equipment segment has done fairly well but demand for plates during the month has remained very low.
- Disparity between mill and trade prices: Trade prices are currently standing at around INR 64,000-65,000/t ($859-872) exy-Mumbai, but list prices of major plate mills are slightly higher at INR 66,000-69,000/t ($886-926) ex-works. “Sellers and traders, having drained out low-priced inventories, are not that eager to trade at low prices. But the buyers are on the lookout for further cheap offers in the market,” informed a Delhi-based trader.
Mills continue to stand firm on their price policy
Major Indian manufacturers of hot-rolled (HR) plates have kept their list prices stable although demand continues to remain sluggish, SteelMint learned from several credible sources.
- JSPL’s offers are hovering at INR 66,000/tonne (t) ($886), ex-works Angul, unchanged for Jul-Aug ’21 shipments.
- JSW’s list price stands at INR 69,000/t ($926) ex-works Anjar.
- SAIL has also rolled over HR plate prices for this week with offers pegged at INR 67,000/t ($899), ex-Mumbai.
China steel plate export prices remain flat
The Chinese heavy plate export offers continue to hover at around $880-890/t FoB China after having gained some support from the current week’s futures market and improved inquiries from a few importing countries.
However, in the previous week, China’s export offers had edged down by $10/t FoB as the wait-and-watch approach of the importers had impacted demand.
Outlook
“The complexity of the current market does not offer room for a clear forecast. In the current situation, one can only observe market sentiments,”said a major plates trader from northern India.
However, a few trade segment participants are expecting a further correction of INR 1,000/t in the coming weeks amid subdued demand and liquidity crisis in the domestic market.
Thus, where the buyers are observing and restricting their procurement to need basis and mill looking out for more export opportunities, it would be interesting to see how the market moves in the upcoming weeks.
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