Prices of trade-level hot-rolled coils (HRC, IS2062, Grade E250, 2.5-8mm) have registered a m-o-m decline, decreasing by approximately INR 300/t ($4/t) to INR 54,000/t ($650/t) in February 2024 compared with INR 54,300/t ($654/t) exy-Mumbai in January. Prices of cold-rolled coils (CRC, IS513, Gr-O, 0.9mm) have fallen by INR 500/t ($6/t) m-o-m settling at INR 61,600/t ($742/t) in February compared to the preceding month’s INR 62,100/t ($748/t) exy-Mumbai.
One among the major flat steel manufacturers, SAIL, had announced an increase of INR 1,000/t ($12/t) for February. The mill’s list price of HRC (IS20262, Gr- E250, 2,5-8mm) stands at INR 55,500-56,000/t ($669-675/t) landed Mumbai and CRC (IS513, Gr-O, 0.9mm) is at INR 60,500-61,000/t ($729-735/t) landed Mumbai. Meanwhile, the updated list price indications from private mills for February hovered around INR 57,500-58,500/t ($693-705/t) landed for HRC, and CRC is priced around INR 63,000-63,750/t ($759-768/t) landed.
These prices are quoted for full coils and exclude GST at 18%. Also, the mills had offered rebates of around INR 2,000-2,500/t ($24-30/t) in January 2024 in response to weak demand in the market.
In the plates segment, monthly average price of HR plate (Gr-E250, 20-40mm) has decreased by INR 400/t ($5/t) m-o-m to INR 60,900/t ($734/t) in February compared to INR 61,300/t ($738/t) on a landed Mumbai basis in January.
Factors influencing prices:
1. Domestic trade-level prices stable: The trade market this month has been defined by need-based buying amidst concerns of surplus. Easy availability, coupled with a recent influx of imports, has led buyers to adopt a cautious approach. Additionally, liquidity issues are prevalent, prompting those in need of liquidity to sell at discounted prices.
2. Downstream utilisation of HRC to CRC improves, exports rise: The downstream utilisation of HRC for CRC production increased to 64% in January over 59% in October-December 2023, as per Joint Plant Committee (JPC) data.
The export volumes of bulk HRC plates (RHS) increased by 13% m-o-m to 0.46 mnt in January as against 0.40 mnt in December 2023 according to the vessel line-up data by BigMint. Demand in the European Union fared well for the manufacturers providing an opportunity to play on the global turf.
However, BigMint’s India HRC (SAE 1006) export index, focused on the Middle East and Vietnam, saw a marginal decrease of $4/t m-o-m, as the average price settled at $597/t FOB east coast India in February. The same had averaged around $601/t FOB in the preceding month.
3. Imports continue to flow: Bulk HRC and plates imports reached 4,17,653 t till 25 February (provisional). In January, the import volume stood at 6,60,344t, while it was 5,29,661 t in December 2023.
Assessment update
As of 27 February, 2024, BigMint’s bi-weekly benchmark evaluation for HRC fell by INR 300/t ($4/t) to INR 53,600/t ($646/t) exy-Mumbai. Also, CRC witnessed a marginal decline of INR 100/t ($1/t), reaching INR 61,500/t ($741/t) exy-Mumbai during the same period.
However, HRC prices have dropped by around INR 900/t ($11/t) in markets such as Faridabad (INR 52,000-53,000/t) and Kolkata (INR 51,000-52,000/t) amid lacklustre sentiments. In contrast, cold-rolled (CR) prices have remained range-bound across markets in the recent assessment. These prices above exclude GST at 18%, and are for cut-to-length (CTL) form. (INR 1 = USD 0.0120456 ; USD 1 = INR 83.0181)
Assessed prices for hot-rolled plates (IS2062, Gr E250, 20-40mm) on a weekly basis exhibited stability, averaging at INR 60,600/t ($730/t) within the broader range of INR 57,000-63,000/t ($687-759/t). These prices are quoted ex-Mumbai, excluding 18% GST.
Outlook:
The easing of imports compared with the preceding month should help lift some pressure off prices. Furthermore, improved downstream utilisation of HRCs shall also help support prices at this juncture. However, the persistent need-based buying in traders’ market, liquidity concerns, and the financial year closure might restrict prices from edging up. Prices are expected to move within a narrow band.