Hot-rolled (HR) coil prices at the trade level held steady across assessed markets, while cold-rolled (CR) prices remained range-bound. Overall trading activity remains sluggish, as cautious market participants predominantly prioritize immediate needs through lower-priced purchases.
BigMint’s benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) prices edged down by INR100/t ($1/t) at INR 54,000/t ($649/t) on 24 January, 2024, compared to the previous week. Also, CRC (IS513, Gr O, 0.9mm) prices fell by INR200/t ($2/t) at INR 61,700/t ($741/t) during the same period. These prices are quoted ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries. (INR 1 = USD 0.0120151 ; USD 1 = INR 83.2288)
Concurrently, the assessed prices for hot-rolled plates (IS2062, Gr E250, 20-40mm) on a weekly basis exhibited stability, averaged at INR 61,100/t ($735/t) within the broader range of INR 57,000-64,000/t ($686-770/t). It is important to note that these prices are based on an ex-Mumbai framework and do not incorporate GST @ 18%.
Market updates:
1. Cautious market stays range-bound with increasing inventory: Soaring inventory levels are squeezing the market, forcing end users to adopt a strictly need-based purchasing strategy at discounted prices. New entrants loom on the horizon, amplifying participants’ expectations for price support measures from established mills.
“Buyers, faced with plentiful stocks and cheaper alternatives, are exercising extreme caution and only committing to purchases at the lowest prices. This reluctance to pay higher could trigger a price spiral unless mills intervene with some incentives, further complicated by the arrival of new competitors”, a market participant opined.
2. Indian HRC export prices decline marginally: The BigMint’s India Hot Rolled Coil (HRC) export index for the Middle East and Vietnam remained stable at $600/tonne (t) FOB east coast India.
HRC export offers from Indian steel mills to the Middle East were steady at $635-640/t CFR, while Chinese offers dropped to $610-615/t CFR UAE due to volatile futures prices.
Indian HRC export price indications to Vietnam remained stable at $615-620/t CFR, with weak market demand and fewer deals due to the approaching Lunar holidays. No firm offers were reported for Vietnam.
Indian HRC exports to Europe remained unchanged at around $720-725/t CFR, as buyers are cautious due to rising production and raw material costs.
3. Imports beginning to catch up to December levels: The cumulative volume of imported bulk Hot Rolled Coils (HRC) and plates reached 471,710t as of January 22, 2024 (provisional), based on vessel line-up data monitored by SteelMint. This catching up with the December 2023 figure of 529,661t.
Outlook:
Trade market prices are likely to stay range-bound with shallow deviation in the near term. Trade channel participants are cautious as inventory is growing and more entrants are getting ready to enter the market.