- Buying slows down amid ample stocks
- Budget fails to boost trade momentum
In India’s stainless steel finished segment, flats prices remained range-bound w-o-w, while longs dropped w-o-w amid tepid demand. Although market participants had anticipated an improvement following the Budget, it failed to materialise.
Another major update for the industry came on Monday, when US President Donald Trump raised tariffs on steel and aluminium imports to a flat 25%, removing all exceptions or exemptions, sending shockwaves through the global trade landscape. However, he said that he would consider exempting Australia from the steel tariffs.
This bold move is aimed at helping struggling US industries but also carries the risk of igniting a multi-front trade war. The decision affects not only the US but also countries such as India, whose industries are closely tied to global supply chains for these metals.
The Indian stainless steel industry expressed concerns over the new US tariffs, fearing that they could strain trade relations between the two countries and negatively affect the domestic market due to diverted shipments. The industry expects stainless steel to be a key topic during the upcoming meeting between Prime Minister Narendra Modi and President Trump.
India’s stainless steel finished flat exports to the US increased by 6%, to 27,785 t in CY’24 from 26,136 t in CY’23. Meanwhile, exports of stainless steel finished longs to the US rose 24% y-o-y, to 21,431 t compared to 17,166 t in the previous year.
The Indian Stainless Steel Development Association (ISSDA) stated that these tariffs are a significant challenge for the industry, restricting market access and intensifying global competition. This could hinder growth and limit job creation. Additionally, the new tariffs may result in a diversion of Chinese and other Asian exports to India, increasing competition and putting downward pressure on domestic prices.
LME nickel prices remain firm
At the time of reporting, three-month London Metal Exchange (LME) nickel prices stood at $15,370/tonne (t), relatively stable given last week’s $15,355/t. Nickel stocks in LME-registered warehouses inched up by 3% to 176,946 t compared to 172,584 t in the previous week.
Finished flats range-bound w-o-w
BigMint’s benchmark assessment for stainless steel (304 series) hot-rolled coils (HRCs) stood at INR 176,000/t ex-Mumbai, down by INR 3,000 w-o-w. Meanwhile, SS 316 HRCs were range-bound w-o-w at INR 320,000-322,000/t ex-Mumbai.
A mill source mentioned, “The overall market remains under pressure as mills face challenges with credit selling and inventory management, leading to a reduction in production capacity. As mid-February arrives and March draws nearer, additional hurdles are expected, including the potential rise in electricity charges.”
Finished longs fall w-o-w
BigMint’s assessment for SS 304L (25-100 mm) black round bars stood at INR 162,000/t ex-Mumbai, down by INR 5,000/t w-o-w.
Meanwhile, SS 316L black round bars stood at INR 269,000-271,000/t ex-Mumbai. Prices of SS 316L bright bars stood at INR 289,000-291,000/t ex-Mumbai, down by INR 8,000/t w-o-w.
A trader source informed BigMint, “While the “Trump effect” has caused some short-term concern in India, its impact is unlikely to be lasting. The real influence continues to stem from LME and nickel prices. Looking ahead, after March, there is hope for an increase in project-based demand and a more balanced market trend.”
SS 304 wire rods (5-16 mm) in Mumbai were recorded at INR 154,000-156,000/t, stable w-o-w.
Raw materials overview
Ferro molybdenum: Indian ferro molybdenum prices witnessed an increase of INR 20,800/t ($239/t) w-o-w as compared to the previous assessment on 29 January. A rise in demand was seen, majorly from European buyers, which pushed up global as well as domestic prices.
As per BigMint’s assessment on 5 February, ferro molybdenum prices in India were at INR 2,538,800/t ($29,130/t) exw on a 60% pro rata basis.
Ferro chrome: Indian high-carbon ferro chrome (HC60%, Si:4%) prices stood at INR 98,500/t, up by INR 1,000/t w-o-w. The price increase was majorly due to increased demand from China following the Lunar New Year holidays.
Global updates
China’s stainless steel output drops in Jan, Feb production set to rise
China’s 43 stainless steel mills produced 2.86 mnt of crude stainless steel in January, down 16.87% from December but up 4.4% y-o-y. The m-o-m decline was mainly due to reduced output across all series, particularly the 200 series, which dropped 21.43%. However, February’s planned production is expected to rise to 3.15 mnt, a 9.94% increase from January and a 23.53% growth compared to February 2024. Notably, the 200 and 300 series will see significant growth.
Outlook
In the short term, the market is expected to experience positive momentum in trade activities because of some infrastructure announcements made during the Budget. However, prices are likely to remain largely range-bound, as demand for stainless steel finished material is not expected to increase significantly. Additionally, the market is awaiting a decision on Trump’s tariffs.
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