The domestic HR-plate price rebounded this week after six weeks of subdued demand and dull trades dragging the prices down in the trade segment. SteelMint’s benchmark assessment for the HR-plate (IS 2062/E350) for 5-10mm has increased by INR 750/t and stands at INR 53,000-53,500/t exy-Mumbai. Price is exclusive of GST @ 18%. However, in other market trades remain subdued on bearish demand and slow buying.
Plate prices may correct further due to the following factors:
1. Demand continues to remain slow- End-user’s demand in the trade segment remains subdued with buyers anticipating prices to weaken further. Buyers continue to remain on a wait-and-watch mode showing reluctance to buy at higher prices. Major OEMs are still procuring materials on an urgent requirement.
2. Few projects are on hold- “Orders booked are 30-40% less as compared to previous month bookings,” shared by major plate producers to SteelMint. Most of the projects are held up. Even export orders in some segments like oil and gas are held up as they are waiting for the new policies by US President Joe Biden. Due to these factors, buying activities reduced which may lead to further correction in prices
3. Higher inventories- Inventory levels in the retail segment are high on slower trades for over a month. Traders have been trying to liquidate their inventories since the prices started to fall in mid-Jan ’20 while trying to maintain their profit margins.
Global HR plate market- Chinese mills have sharply raised HRC plate export offers by around $55/t w-o-w basis. Current offers are hovering in the range of $685-690/t FoB China. Last week the offers were in the range of $630-635/t FoB basis.
Export offers are expected to remain on the higher side on resumption of trades post the week long Lunar New Year holidays.
Near-term outlook on Indian plate prices- One of the major steel mills has started offering discounts on plates to escalate buying in the domestic market. Also, market participants believe that mills might roll over or even provide discounts for year-end clearance. However global plate prices are expected to increase on possible export rebate cuts in China.
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