This week’s domestic HR-plate price witnessed a steep increase in the traders’ market by around INR 1,000-1,500/t in anticipation of a hike to be announced by major mills in the first week of May ’21.
SteelMint’s benchmark assessment for the HR-plate (IS 2062/E350) for 5-10mm stands at INR 64,000-64,500/t (exy-Mumbai). Last week, the price stood in the range of INR 62,500-63,500/t (exy-Mumbai). The prices mentioned above are exclusive of GST @ 18%.
However, the domestic market is witnessing a reduction in buying intent due to the stalled open market activities in various regions on surging infection cases and containment measures laid down by provincial governments.
“Delhi and Mumbai regions are seeing a massive increase in infection cases hindering trade activities. However, a complete lockdown is out of scope, but the rising numbers might convince the government to announce a stringent lockdown,” shared a reliable trade source based in Northern India.
The factors driving HR-plate prices are as follows:
1. Improved sales of tractors- Rural prosperity drives tractor ahead of truck in sales and revenues in FY ’21. The agriculture and allied sectors grew despite the pandemic, boosting demand for tractors and other farm equipment. The tractor sales of Escorts Agri Machinery Segment and Mahavira’s Farm Equipment Sector increased by 10% annually to 11,730 units and 29,817 units respectively.
2. Growth in railway and metro order book- The railways and metro development projects are also gaining momentum. KEC International Ltd. has secured orders of INR 446 crore in technologically enabled/ conventional segments in India for overhead electrification along with the third rail and metro orders and associated works, SteelMint learned from the company’s official press release.
Central Government has also approved phase 2 of the Bangalore Metro Rail Project to ease the traffic woes in Bengaluru. The project’s total length is about 58 kms with phase 2A spanning Central Silk Board Junction to K.R. Puram and Phase 2B from K.R. Puram to Airport via Hebbal Junction. The project cost is estimated at INR 14,788 crore.
3. Resumption in construction sector- The easing of the Covid measures early this year led to the resumption of previously stalled projects.
The Gurugram Metropolitan Development Authority (GMDA) in Haryana is constructing sector-dividing roads in 20 sectors. A budget of INR 99 crore has been allocated to build approximately 16 km roads in these sectors and expected to be completed by July 2021.
China plate export offers hit an all-time high- The global plate prices are on a surge with the Chinese HR-plate(SS400, 5-10mm) export offers, hitting an all-time high at $850-870/t FoB basis this week, rising up from $850-860/t FoB basis a week back. The offers have gained more traction from the market chatter about a possible cut in export rebate from 13% to 9% or it being phased out altogether.
Outlook- The prices of HR-plates shall continue to remain strong backed by the increased preference of coil form in the overseas market. Also, the supplies are anticipated to remain tight with the steel industry players aiding the medical sector by supplying oxygen to hospitals due to the recent surge in COVID-19 infection cases throughout the country.
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