India: Finished stainless steel prices remain range-bound w-o-w as market fails to gain momentum after Budget

• Finished longs prices drop on weak demand
  
  
• Budget FY'26 revises tariff on flat products
  
  

India's stainless steel finished flats prices remained range-bound while finished longs dropped w-o-w amid weak demand in the finished segment and declining LME nickel prices. Although market participants had anticipated an improvement following the Budget, this has failed to materialise.

Budget FY'26: Tariff on stainless steel flat products revised, effective duty unchanged

In a move to support trade and industry growth, the Indian government has revised the tariff rate on flat-rolled stainless steel products (600mm or more in width) from 22.5% to 15%, effective 2 February 2, as part of Budget FY'26. However, the basic customs duty (BCD) remains unchanged at 7.5%, ensuring no impact on the overall effective duty. India imported 1.15 million tonnes (mnt) of stainless steel finished flat products in CY'24, marking a 15% increase from CY'23.

LME nickel prices fall

At the time of reporting, three-month London Metal Exchange (LME) nickel prices stood at $15,355/tonne (t), down 2.7% from last week's $15,790/t. Nickel stocks in LME-registered warehouses remained stable at 172,584 t compared to 172,302 t in the previous week.

As per secondary sources, Chinese firms control around 75% of Indonesia's nickel refining capacity, raising concerns about supply chain control and environmental risks. Indonesia's 8 mnt refining capacity is spread across 33 companies, but Chinese firms, particularly Tsingshan Holding Group and Jiangsu Delong Nickel Industry, dominate.

This foreign influence could hinder Indonesia's ability to fully benefit from its nickel industry. Additionally, the reliance on Chinese-controlled nickel puts US and European automakers at a competitive disadvantage in the global electric vehicle market.

Additionally, India's ferro nickel imports stood at 0.19 mnt in CY'24 (until November 2024), compared to 0.10 mnt in the CY'23. Indonesia remained the top supplier to India.

Finished flats prices range-bound

BigMint's benchmark assessment for stainless steel (304 series) hot-rolled coils (HRCs) stood at INR 179,000/t ex-Mumbai, steady w-o-w. Meanwhile, SS 316 HRCs were at INR 320,000-322,000/t ex-Mumbai, range-bound w-o-w.

A source said, "The demand for finished steel remains sluggish, with liquidity issues further affecting market sentiment. While there were expectations for a positive market movement in February, the current situation makes it difficult to predict the direction or scale of any potential recovery. Market conditions continue to be uncertain, and it remains to be seen how the situation will evolve."

Finished longs fall w-o-w

BigMint's assessment for SS 304L (25-100 mm) black round bars stood at INR 167,000/t ex-Mumbai, down by INR 1,000/t w-o-w.

Meanwhile, SS 316L black round bars stood at INR 276,000-278,000/t ex-Mumbai. Prices of SS 316L bright bars stood at INR 297,000-299,000/t ex-Mumbai, slightly down by INR 2,000/t w-o-w.

SS 304 wire rods (5-16 mm) in Mumbai were recorded at INR 154,000-156,000/t, reflecting a slight drop of INR 1,000/t w-o-w.

A mill source mentioned, "Construction activities have remained slow so far, with government projects not yet progressing at full capacity. This has contributed to the overall subdued market conditions, further delaying any significant recovery in demand."

Raw materials overview

Ferro molybdenum: Indian ferro molybdenum prices witnessed an increase of INR 20,800/t ($239/t) w-o-w as compared to the previous assessment on 29 January. A rise in demand was seen, majorly from European buyers, which pushed up global as well as domestic prices.

As per BigMint's assessment on 5 February, ferro molybdenum prices in India were at INR 2,538,800/t ($29,130/t) exw on a 60% pro rata basis.

Ferro chrome: Indian high-carbon ferro chrome (HC60%, Si:4%) prices stood at INR 97,500/t, down by INR 700/t w-o-w.

Outlook

The near-term outlook for finished stainless steel remains cautious as demand continues to be weak, compounded by ongoing liquidity issues which are dampening market sentiment. While there were hopes for a recovery in February, current conditions suggest that any positive movement may be limited or delayed.