India: HR-plate trade-level prices fall further by INR 1,300/t ($17/t), buying remains slow
Prices of hot-rolled plates (HR-plate) have come down further by about INR 1,000-1,300/t ($13-17/t) in the key markets this week. The decline in global plate prices and l...
Prices of hot-rolled plates (HR-plate) have come down further by about INR 1,000-1,300/t ($13-17/t) in the key markets this week. The decline in global plate prices and limited activities in the trade segment in the past week has weighed on the prices.
For week 49 (29 Nov-04 Dec'21), SteelMint's assessment for HR-plates (E250, 5-10mm) dropped by INR 1,000/tonne (t) ($13/t) to INR 68,000-69,000/t ($905-918/t) exy-Mumbai. Prices are basic, excluding GST at 18%.
Factors that are weighing on the price momentum:
1. Global plate prices tread lower: The prices of plates in global markets have been on a consistent decline for over a month now. For instance, the export offers of Chinese heavy plates have continued their descent since mid-Oct'21- dropping from the levels of $925-940/t FOB, by about $120/t to the current week's $800-820/t FOB. The offers have fallen by $10-20/t on a weekly basis, running into the seventh week of continual decline.
2. Domestic market activity remains slow: Sluggish demand in the end-user segment throughout the month of November has kept the prices under pressure. Furthermore, the trade segment participants have remained on the sidelines in the past few days and are waiting for the price announcement for Dec'21.
Most of the participants are of the opinion that mills will reduce their prices for Dec'21 dispatches. However, no official announcements from mills have been made in this regard.
3. Weak performance from farm equipment makers: Two of the major farm equipment manufacturers have shown a slump in their sales figures for Nov'21. In Nov'21, the domestic sales volume of Mahindra and Mahindra's Farm Equipment Sector was at 26,094 units (down, 43% m-o-m), whereas that of Escorts Agri Machinery was at 6,492 units (down, 49% m-o-m). This has a direct relation to sales of accessories and affects the demand from allied segments such as the heavy fabrication industry.
Near-term outlook
The prices for plates in the domestic market may remain under pressure in the near term due to the falling global steel prices.