Indian plate manufacturers have sharply increased domestic list prices on the back of healthy export order bookings.
As per latest reports, steel major JSPL has hiked domestic prices abnormally by INR 11,000/t to INR 95,000/t ex-plant basis, equivalent to INR 98,500/t exy-Mumbai, exclusive of GST at 18%, for early-April sales.
AM/NS India has also raised prices by INR 16,000/t. The effective price of HR plates is assessed at INR 95,000-95,500/t exy-Mumbai, excluding GST at 18%.
Likewise, State owned SAIL is also heard to have increased steel plate prices by INR 10,000/t for early-April deliveries. Current trade prices stand at around INR 82,000/t exy-Mumbai, exclusive of GST at 18%.
Meanwhile, there is limited domestic demand seen at these levels as prices are way too high, SteelMint learnt, and end user industries are struggling to absorb such a steep hike.
Factors backing mills to hike domestic prices:
Healthy export bookings by Indian mills: Indian mills have concluded a healthy volume for export bookings lately. Last month export bookings were concluded by Indian mills at around $1250-1,450/t (around INR 82,500-98,000) CFR Europe. On an average around 40,000-45,000 t of HR plates get exported from India every month, however last month export volumes rose by 40-50%, SteelMint understands. At present, domestic mills are largely focussed on exports due to higher realisations and are booked until mid-May 2022.
EU Quota redistribution: There emerged a huge supply crisis of steel products globally due to the Russia-Ukraine war and subsequent sanctions on Russia as both the countries are largest suppliers. Therefore, the European Union, proportionally redistributed the steel imports quota of Russia and Belarus in each product category among other exporting countries. The Apr-Jun quota for plates was up by 19% y-o-y.
Near term outlook:
SteelMint understands that last month, Chinese mills had concluded four parcels of 40,000 t each slabs at $855/t – $860/t, FOB levels to Europe, excluding the freight cost at $140/t.
In addition, the supply situation in the EU region is likely to improve as production at steel mills in Ukraine (Zaporizhstal and ArcelorMittal Kryvyi Rih) with the war situation easing. Asides from this, it has been heard that Russia has silently resumed export offers. However, no deals have been heard to have concluded yet.
Thus, Indian domestic HR plate prices are likely to come down after mid-May 2022 with an expected decline in exports prices.
Leave a Reply