Private plate producing mills have announced an increase of around INR 1,000/t ($12) in their hot-rolled (HR) plate list prices for early-October sales. Subsequent to the announcement, list prices for HR-plates (E250, 20-40mm) stand at around INR 64,000-64,500/t ($784-790) exy-Mumbai.
As per the current week’s assessment, trade level prices of HR-plates (E250, 20-40mm) remained unchanged w-o-w at INR 60,500-61,500/t ($741-754). On the other hand, hot strip mill (HSM) plates (E250, 5-10mm) edged up by INR 500/t ($6) to INR 57,500-58,500/t ($705-717). Prices mentioned above are exy-Mumbai, excluding GST @18%.
What factors are lending support to the trade-level prices?
1. Infrastructure segment also ramping up activities: It is a welcome sign that infrastructure and construction industries are also procuring. An addition of 419 kilometers (km) of national highways were done in August 2022, as per data from the Ministry of Road Transport and Highways (MoRTH). In April-August 2022, a total of 2,912 kms of national highways were constructed. Moreover, the ministry has awarded contracts for further construction of 731 kms in August, pulling up the cumulative figure to 2,706 kms for the current fiscal year. In addition, the government is expecting another 3 million tonnes of steel demand in FY23 on account of the INR 10 lakh crore infrastructure push.
2. Improved automobile industry sales and production performance: Automobile sales have also showed an improved performance in August 2022. Commercial vehicle sales numbers spiked by 26.36% y-o-y to 67,158 units in August, while these increased marginally by 1.05% m-o-m, as per the data from Society of Indian Automobile Manufacturers (SIAM).
At the manufacturer level, Tata Motors Limited sold 32,979 units of CVs in September reporting an increase of 12.5% y-o-y and 9% m-o-m, as per the company’s filing on Bombay Stock Exchange (BSE).
Also, Mahindra and Mahindra Limited produced 23,581 units of CVs in August, an increase of 75.7% y-o-y and 5.3% m-o-m.
This improvement in the automotive segment performance attracted demand for plates from allied industries like vehicle body fabricators, and heavy equipment manufacturers.
3. Healthy demand in retail segment: Demand for HR plates has been better in comparison with those for coils over the past few months. Sustained buying among downstream industrial buyers has lent support to the prices, pulling these up since mid-September. Furthermore, restocking activities by distribution network participants picked up pace in September as the prices had bottomed out. This affirmed the positive sentiment with respect to the price levels, and also propelled mills to raise their list prices for early-October sales.
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