India: Bearish demand, cheaper imports drive down stainless-steel prices w-o-w

India's stainless-steel market noticed a downtrend in recent weeks, amid bearish demand and falling futures. Prices of the 304-grade hot-rolled coils (HRCs) inched down by INR 2,000/t w-o-w to INR 198,000/t ($2,414/t) exw. Meanwhile, 304-grade scrap prices remained largely stable w-o-w at INR 128,000/t ($1,560/t) ex-Delhi.

The Indian stainless-steel industry is facing challenges due to tough competition from cheaper imports and sluggish demand, especially concerning the 300 series. As a result, there is considerable downward pressure on prices, leading major manufacturers in India to reduces prices.

Market overview

Influx of imported cheaper 200 and 300 series stainless steel coils led to curtailed production in India over the last few months. It has badly affected Ahmedabad region's patta producers. The price drop in the domestic market continued amid the availability of cheaper options. As per sources, a major Korean producer sold around 3,000-3,500 tonnes of material two weeks ago at a level of $2,150/t, CFR West Coast India, which is $250/t lower than the domestic market price.

Additionally, as per sources, the ministry has dropped the DGTR recommendation to continue the CVD on certain flat-rolled steel products imported from China to protect prices for the end consumer.

Prices in the scrap market held steady as a result of the approaching European summer holidays. Farshore (US/UK) offers for 304 scrap were $20-30/t less than nearshore rates, which were expected to be in the range of $1,470-1,490/t. Due to strong purchases from producers, domestic scrap prices are likewise stable.

Raw materials market overview

• Ferro chrome: Due to sluggish demand and the gloomy outlook on the Chinese market, Indian ferro chrome (HC 60%) prices continued to decline this week. Prices decreased by INR 1,200/t w-o-w. According to SteelMint's assessment on 13 July, Indian ferro chrome prices stood at INR 100,800/t exw-Jajpur.
  
  
• Ferro molybdenum: On the other hand, prices of ferro molybdenum (FeMo 60% material) stood at INR 26,25,000/t, showing a decrease of 2.1% w-o-w.
  
  
• LME nickel: Three-month nickel futures on the London Metal Exchange (LME) decreased marginally by 1% w-o-w to $20,835/t. Notably, nickel and ferro molybdenum are the key raw materials used in stainless steel production.
  
  

Outlook

Due to sluggish demand and the availability of comparatively cheaper imported materials in the domestic market, participants believe that there is still opportunity for further price reductions.