Indian hot-rolled (HR) plate (E250, 20-40mm) prices dropped by INR 1,500/t this week. Since the beginning of the month, demand for plates slowed in the traders’ market with buyers turning cautious as the difference between coil and plate prices expanded in November. Also, the downtrend in global plate prices over the past seven months weighed on the sentiments.
SteelMint’s assessment for HR plate (E250, 20-40mm) stood at INR 57,000-58,000/t exy-Mumbai (down, INR 1,500/t), excluding GST @ 18%, as on 15 December 2022.
Why did trade prices of plates start dropping in Dec?
1. Availability of slabs: The availability of slabs improved in the country in FY2022-23 (FY23) amid import activities picking up since July this fiscal year. There were hardly any imports in the April-June period, while 83,412 t of slabs were imported over July-November, 2022, as per the vessel line-up data maintained with SteelMint. Also, in the previous fiscal, only 20,000 t of slabs were imported in November 2021.
Furthermore, exports of slabs also dropped by 30% y-o-y in April-November of FY23. During the said period, a total of 261,713 t of slabs were exported contrasted against 375,255 t in the previous fiscal.
This led to improved supplies of slabs which is the primary feed material for making plates.
2. Decline in global plate prices: Plate export offers on the global platform were on a decline as well. On a monthly average basis, Chinese (SS400) heavy plate offers dropped by $27/t in November to $558/t FOB Rizhao as against $585/t FOB in October. Morevoer, the prices had started the downward slide from $889/t FOB in April. This also worked to the benefit of Indian buyers.
3. HRC-plate price gap widens: The price gap between HR-plates and HRCs widened to INR 4,800/t in November-December, 2022 as against INR 1,000-1,500/t in May 2022. This trend was noticed globally as well, which was largely on the back of reduced supplies of slabs from Russia post-Russia-Ukraine war. This changed the global slab supply dynamics and key destinations, which resulted in increase in plate offers globally.
4. Sluggish demand in the traders’ market: Demand in the traders’ market has remained slow in the aftermath of Diwali holidays. The marginal declines in November deepened in December. “Buyers have been cautious of buying at the prevailing prices while they adhered to need-based procurement and bargained actively,” few reliable sources informed. Trade channel checks suggest that plate prices are still elevated and further softening is expected by the buyers.
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