The monthly average of trade-level hot-rolled coil (HRC, 2.5-8mm / CTL, IS2062, Gr- E250 Br.) prices remained rangebound, decreasing by INR 200/t ($2/t) to INR 52,600/t ($630/t) in April 2024, as against the previous month’s figure of INR 52,800/t ($670/t) exy-Mumbai.
Simultaneously, cold-rolled coils (CRC, 0.9mm / CTL, IS513, Gr-O) prices experienced a nominal decline of INR 100/t ($1/t) m-o-m, settling at INR 61,200/t ($733/t) in April 2024, compared to the preceding month’s INR 61,300/t ($734/t) exy-Mumbai, excluding GST at 18%.
Market updates:
1. Mills increase list prices for April sales: A major HRC and CRC producer had increased their list prices for early-April 2024 sales. The quantum of increase was around INR 500/t ($6/t) post which a few mills announced an interim hike by similar quantum towards end-April 2024.
The mills’ list prices of HRCs have risen by up to INR 53,500-54,000/t ($640-646/t) ex-Mumbai, while those of CRC edged up to INR 58,800-60,500/t ($704-724) exy-Mumbai, excluding GST at 18%. Meanwhile, market participants have been informing about mills further increasing their list prices by INR 500-1,000/t ($6-12/t) for May sales.
2. Mills announce maintenance shutdowns in May: Several steel mills in India undertook strategic maintenance activities in April 2024. This included a 15-day shutdown at one hot strip mill (HSM) and a similar duration maintenance at a cold rolling mill (CRM) belonging to a private producer, according to industry sources. The short fall in CRC is estimated around 90,000 t, over the 11 days timeline from 26 April, informed sources.
Furthermore, moving into May 2024, three major private mills are thinking about taking one HSM each for a maintenance run. The production loss in May is expected to be around 310,000 t. Moreover, one of the mills’ tenure shall extend till late June resulting in a loss of another 180,000t, shared some reliable industry participants.
These shutdowns are a strategic response to ease out their inventory piles amid the low buying interest observed in both domestic and international steel markets.
3. Domestic trade market sees need-based buying, price resistance: The domestic traders’ market is characterised by need-based procurement, with buyers making smaller, immediate purchases tailored to their specific requirements. This trend coincides with distributors raising their offers due to supply constraints.
“Distributors and other sellers are quoting higher amid the anticipation of shortfall in supplies and price hike by mills for May. On the other hand, buyers are still resisting the increases, attempting to negotiate for lower quotations,” informed a distributor source.
4. Export, import trends: India’s exports of bulk HRC and plates are slowing down as per the vessel line-up data maintained with BigMint. Whereas, imports continued to edge closer to the previous month’s level.
BigMint’s weekly assessment for the HRC (SAE1006) export index remained unchanged at $560/t FOB east coast India. This pricing targets offers to the Middle East and Vietnamese markets. The stability suggests that Indian steel mills are prioritising the domestic market over exports due to better realisations and supply constraints arising from strategic maintenance shutdowns.
Meanwhile, global tensions in the Mediterranean and sluggish end-user consumption in the EU are prompting distributors and spot buyers to adopt a cautious approach. They are opting for a smaller, more frequent purchases (minimising price risks) at indicative CFR Antwerp prices of $625-635/t ($575-585/t FOB east coast India). This shift follows a rise in domestic EU prices supported by restocking activities and a weak dollar (Euro appreciation). Additionally, buyers are delaying overseas purchases due to long lead times.
Assessment update for the week:
BigMint’s benchmark evaluation (bi-weekly) for HRC notched up to INR 53,600/t ($642/t) exy-Mumbai as on 30 April 2024. This is higher by INR 200/t ($2/t) against the previous assessment on 26 April. Taking note of the same period, CRC prices increased by INR 300/t ($4/t)to INR 61,200/t ($733/t) exy-Mumbai. These prices mentioned above exclude GST at 18%, and are for cut-to-length (CTL) form. (INR 1 = USD 0.0119718 ; USD 1 = INR 83.5293)
Outlook:
Traders’ market prices of HRC and CRC products are likely to increase at a slow pace in the upcoming week. The expectation of a list price hike by mills for May sales and the maintenance shutdowns during the month shall help maintain the sentimental buoyancy in the traders’ market.