India: Domestic HR-plate prices stable despite low demand

Domestic hot-rolled (HR) plate prices stand unchanged this week after an increase of INR 700/tonne (t) a week ago. Trade activities continued to be weighed down by persistently low end-user demand. However, there are positive notes on government investments and better prospects from original equipment manufacturers (OEMs).

For week 38 (13-18 Sept'21), SteelMint's assessment for HR plates (IS 2062/E250, 5-10mm) hovers at around INR 65,500-66,500/t exy-Mumbai. Prices are basic, excluding GST at 18%.

Factors bearing down plates demand

1. Rainfall disrupts activities: The uneven rainfall being witnessed since the middle of last week has disrupted major construction and infrastructure activities in various provinces of the country.
"The central and northern regions of the country have received heavy rainfall in the past couple of weeks, weighing on the activities of the construction sector. This has adversely impacted the slight recovery witnessed in demand from this segment," a few distributors from northern India said.

2. Chip shortages pose major concern for OEMs: Commercial vehicle (CV) and other OEM manufacturers are concerned about the chip shortage even though they are benefitting from increased sales volumes due to the gradually recovering economy. It is likely that there will be some pressure on the production of vehicles, which will impact demand for steel plates.

3. Trade channel partners seek support from mills: The difference in plate prices between end-users and sellers is posing a barrier in the conversion of enquiries to sales. The trade reference prices are still at a discount from what the mills offering.
"The trade is slow in the retail segment and pricing remains the major barrier," SteelMint learnt from a western India-based market source.

China's heavy plates export offers rise w-o-w:
This week, Chinese heavy plate export offers moved up by $5-10/t to $910-920/t FOB China, as against $900-915/t FOB the previous week. Prices have recovered after three weeks of continual fall. There is a possibility that vessel availability concerns and high freight rates are providing the thrust to export offers from mills.

Outlook
HR-plate prices are likely to remain under pressure on persistently subdued demand. However, manufacturers are looking forward to a revival in demand in the coming weeks as the monsoon season concludes and activities from the construction and infrastructure sectors pick up.