Trade prices of hot-rolled (HR) plate have remained rangebound for the third consecutive week. Better demand from the infrastructure and construction segments and increasing global prices have driven up HR plate prices, are some of the reasons highlighted by sources.
SteelMint’s weekly assessment for plates (E250, 20-40mm) stood at around INR 62,500-63,500/t ($756-759/t) exy-Mumbai. The market has been hovering at this level since the last week of February, as per SteelMint data. (INR 1 = USD 0.0121029 ; USD 1 = INR 82.6251)
Factors driving up plate prices
1. Pace of infrastructure development: The infrastructure and construction segments consume the lion’s share of steel produced, followed by the yellow goods sector and other industrial consumers. There has been an addition of 1,261 kilometers (km) in the national highways in February, the highest in this fiscal year, as per recent press updates by the Ministry of Road Transport and Highways (MoRTH).
A total of 8,064 km of national highway was constructed during (April-February) in FY23, which is higher than 8,045 km in the year-ago period.
2. Supplies constrained in domestic market: Another reason for prices rising is constrained supply in the domestic traders’ market. “Supplies are quite limited from private plate producers in the traders’ market,” informed a major distributor source based in western India. Mills are supplying majorly to projects on a long-term contract basis. Thus there is limited allocation for small merchant players. However, slow procurement by industrial buyers in the traders’ market during the Holi festival is weighing on prices in the first fortnight of March, the source added.
The above can be linked to the elevated list prices announced by private producers for March sales which are higher by INR 5,000/t ($61/t) than that of PSU steel manufacturers. Private producers had increased their list prices for HR plates (E250, 20-40mm) by about INR 1,500/t ($18/t) with effect from 1 March to INR 69,000/t ($838/t) exy-Mumbai, excluding GST at 18%. PSU steel major, SAIL, has increased prices to INR 64,000/t ($777/t)exy-Mumbai, excluding GST at 18%. (conversion rate as on 1 March was 1 INR = USD 0.012138)
3. Strong global prices: Plate prices globally have continued to remain strong. For instance, Chinese heavy plate (SS400, 14-20mm) prices stood at around $690/t FOB on 15 March, up $10/t w-o-w. Prices rose by $120/t as against $570/t FOB in early December 2022, when the prices had begun to increase. Furthermore, the Chinese steel major, Baosteel, increased its domestic plate prices by RMB 200/t ($29/t) for April sales earlier this week. This is another factor keeping prices supported in the domestic and overseas markets.
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