Moving into November, major Indian steel plate producers have announced a rollover of list prices compared with October. Following steady demand for hot-rolled (HR) plates, trade-level prices have not changed w-o-w.
List prices for November sales:
- JSPL: List price for plates (E250, 20-40mm) unchanged at INR 64,000/t.
- AMNS India: List price for plates (E250, 20-40mm) unchanged at INR 62,500/t.
- SAIL: List price for plates (E250, 20-40mm) unchanged at INR 62,500/t.
- Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
Factors impacting demand, prices
1. Sustained demand: Demand has remained steady over the past few months. Despite the decline in prices from April to mid-September demand has remained consistent albeit slow. Trade-level prices of hot strip mill (HSM) plate (E250, 5-10mm) dropped from the peak of 78,500/t in early-April to the level of INR 56,400/t in mid-September. Meanwhile, plate mill (PM) plates (E250, 20-40mm) dropped to INR 59,500/t in mid-September from INR 78,500/t in early-April. Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
a) Slow and steady procurement: The continual decline since April has kept buyers cautious who are placing orders as per urgent requirements. Demand from the construction and infrastructure businesses which accounts for about 60% of steel produced was moving at a slow pace. For instance, national highway construction continued to move at a slower pace compared to the last fiscal year, as per data from the Ministry of Road Transport and Highways (MoRTH).
On the other hand, the automobile industry, which consumes 9-10% of steel produced in the country, showed some resilience this fiscal. Automobile industry behemoths started showing improvement in production volumes since May, as per data released by the Society of Indian Automobile Manufacturers (SIAM). The point to note here is that in September production moved up to 2,479,256 units breaching the level of 2,214,745 units in October 2021.
b) Restocking demand: Towards mid-September, the major steel mills signalled an impending hike in the list prices of plates. This buzz in the market urged the distribution network participants, who had previously maintained low stock volumes amid the continual decline in prices, to replenish their inventories. Meanwhile, trade market prices started rising on restocking activites but was short-lived amid need-based procurement from end-users.
2. Stablility in trade-level prices: The trade-level prices of HSM plates (E250, 5-10mm) remained volatile due to movements in HRC prices. However, plate mill (PM) plates (E250, 20-40mm) remained mostly stable with average monthly prices staying rangebound at INR 61,100/t exy-Mumbai in September and October. “Wind turbine manufacturers and others in the green energy segment along with railway wagons manufacturers were among those maintaining a steady flow of demand for plates this fiscal. However, the other segments under the umbrella of infrastructure and construction signalled slow demand,” informed a distributor source. The improved performance of the automotive sector has created some demand from the fabrication industries, he added.
Trade-level prices unchanged w-o-w
Trade-level prices of HSM plates (E250,5-10mm) have remained stable at INR 56,500-57,500/t, while prices of 20-40mm thick material are at INR 60,500-61,500/t as on 3 November. Prices are on exy-Mumbai basis, excluding GST at 18%.
Near-term outlook:
Trade-level prices of plates above 20mm thickness are likely to remain firm in the near term amid sustained demand, whereas prices of 5-10mm thick material are likely to mirror the movements in HRC prices despite better demand prospects, sources informed.
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