Trade reference prices of HR-plates in key markets fell this week amid slow supplies and limited end-user demand. Furthermore, a decline in overseas offers for heavy-plates and hot-rolled coils has raised concerns among buyers who are expecting a further decline in prices.
For week 47 (15-20 Nov’21), SteelMint’s assessment for HR-plates (E250, 5-10mm) dropped by INR 1,500/tonne (t) ($20/t) to INR 70,000-71,000/t ($943-957/t) exy-Mumbai. Prices are basic, excluding GST at 18%.
Continual decline in global plate prices weighs on buying interest: The decline of $105/t in Chinese heavy plate prices over the past five weeks has increased concerns among buyers and traders alike. This week, Chinese heavy plate (SS400, 14-40mm) export offers stood at around $820-835/t FOB, which was at around $925-940/t FOB as assessed on 14 Oct’21.
Also, a continual fall in export offers when steel output in China is declining amid ongoing production cuts, adds more to the concerns.
“In case, overseas prices continue to fall, domestic mills might have to explore the options of providing price support or price cuts,” said a reliable source based in western India.
Demand for hot-rolled plates continues to remain on the lower side amid need-based procurement at the current elevated price levels. The end-buyers have turned observant of the market and are expecting trade prices to come down further in the near term.
Auto ancillaries hit by decline in tractor, CV sales: In Oct’21, tractor sales stood at 44,262 units, and commercial vehicle (CV) sales at 44,262 units, both falling by 4% and 16% on the month respectively, as per data released by the Federation of Automobile Dealers Associations (FADA). This has also impacted plates’ demand from the auto ancillary industry.
Near-term outlook
Trade channel participants are of the opinion that mills may have to provide price support to boost buying interest amid sluggish demand. Only limited distributors who are required to “honour their trade commitments” are active in the market, reliable market sources said.
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