This week domestic HR-plate price witnessed a steep increase in the traders’ market of around INR 1,500-2,000 t in anticipation of a hike to be announced by major mills in the first week of Apr ’21.
SteelMint’s benchmark assessment for the HR-plate (IS 2062/E350) for 5-10mm stands at INR 54,500-55,500/t (exy-Mumbai). Last week, prices stood in the range of INR 53000-53,500/t exy-Mumbai. Prices mentioned above are exclusive of GST @ 18%.
Factors driving HR-plate prices:
1. Higher offers for steel slabs- HR-plates are mainly made of slabs. Thus, higher slab offers will in turn drive plate prices. SAIL, the government-owned company, invited an export tender for slabs from Bhilai steel plant, Chhattisgarh. The shipment is scheduled for the end of Apr ’21. However, the tender got cancelled due to slightly lower bids of around $600/t Fob while the expectation was at $610-615/t FoB, SteelMint understands.
2. Resumption of construction projects- Witnessing a major setback on COVID-related hindrances, the construction industry had suffered a lot. The govt. has set the construction activities in motion with various projects getting started or revived. SteelMint, while acknowledging market reports, witnessed that Welspun Enterprises, a well-known integrated player of pipes has 8 HAM projects in hand with the recent project entailing six-laning of Kozhikode Bypass of NH-66 in Kerala. The length of the road is around 28.4 km with an original bid project cost of INR 1,710 Cr.
3. Shipbuilding opportunities- HR-plates are widely used in the shipbuilding sector. As per the latest market reports published in Business Line, US and India are focused on collaborating for defence and commercial shipbuilding sectors. India in recent years has been increasingly looking to expand its shipbuilding industry.
4. Improved performance in the Commercial vehicle segment- A few major auto industry giants have posted higher sales in the heavy commercial vehicles (HCV) segment in Feb ’21, and are bullish towards ending the quarter on a good note. Ashok Leyland Limited’s HCV sales were recorded at 7,114 units up by 5% against 6,745 in CPLY. Truck (M&HCV) sales accounted for 6,790 units surging up by 44% y-o-y. Volvo Group India stands bullish about its truck sales and expects the Indian market to surge by 30-40% in FY ’22.
Near term outlook- Indian plate manufacturers are planning to lift HR-plate prices by up to INR 2000/t in the first week of Apr ’21. Meanwhile, HR-plate export offers to continue to remain on the higher side. Thus, we expect the plate market to remain bullish in the near term.
Leave a Reply