Domestic hot-rolled (HR) plate prices continued to hover in the range seen in the previous week on account of subdued demand in the end-user segment.
For week 34 (16-21 Aug’21), SteelMint’s benchmark assessment for HR-plates (IS 2062/E250, 5-10 mm) stands at around INR 66,500-67,000/t exy-Mumbai. The prices mentioned above are exclusive of GST @18%.
What is going on in the market?
1. Sluggish demand: Buying interest has remained limited in both downstream manufacturing and construction segments this year. Most of the buyers are delaying procurements in anticipation of a further decline in prices.
“There are buyers and deals are happening, but the point to note is the size of orders. The buyers have now adhered to a hand-to-mouth trend in their buying patterns,” said a reliable source from western India.
2. Inventory pile-up in trade segment: Owing to the lull in demand, the market is seeing an increase in inventories.
“The slight pick-up in demand at the beginning of the week was because of restocking by some participants in the distribution channel. However, the movement of plates in major plate-consuming industries is still slow,” shared a north India-based trader.
Mills, on the other hand, continue to stick to their price levels and are observing retail segment demand and prices before announcing any revision.
China’s heavy plate export offer flat on Covid concerns: The Chinese heavy plate export offers stand unchanged this week at $935-950/t FoB basis.
Domestic market activities were adversely impacted by Covid-19 and logistical constraints, while the continued uncertainty around the export tax announcement kept importers on the sidelines.
Outlook
Domestic prices are likely to remain under pressure because of the low buying interest. Also, HR plate prices are under pressure. Some customers may cancel their orders in expectation of softening of plate prices by mills. HR plate manufacturers will most likely consider a correction in the list prices by the end of this month. However, demand is expected to pick up in September as there is good visibility, particularly in the wind tower, boiler and pipeline segments.
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