India: HR-plate trade market prices drops INR 1,800/t ($23/t) w-o-w on slow demand

The trade market prices of HR-plate continued to decline for the second consecutive week amidst slow demand and softening of sentiments because of the downtrend in global plate prices. SteelMint's assessment for HR-plates (E250, 5-10mm) declined by INR 1,800/t ($23/t) to INR 69,500-70,500/t ($897-910/t) exy-Mumbai this week. Prices are basic, excluding GST at 18%.

Buying pattern remains need-based
Demand in the domestic market has continued to remain slow as buyers are postponing their puchases and currently buying as per urgent need basis. "Slow demand from infrastructure and construction projects amid increased project costs (due to elevated steel prices) is weighing on demand from other supporting sectors like OEMs, fabrication and MSMEs," SteelMint learned from trade market sources. Furthermore, continual decline in hot-rolled coil (HRC) prices is also weighing on buying interest.

Meanwhile, data from market indices show a slow growth momentum. For instance, the Purchasing Manager's Index (PMI) at 54.7 in April 2022 is still down by 1.4% against 55.5 a year ago, showing slow growth momentum.

Decline in global plate prices weighs on buying interest
The softening of plate prices in the global market is raising concerns amongst domestic buyers. The Chinese heavy plates (SS400) export offers which stood at $860-875/t FOB in early-May have steeply dropped to $800-835/t FOB, as per the current week's assessment. Slowing of demand as buyers move to the sidelines amid a strengthening dollar weighed on offers from China. Meanwhile, the continual decline in plate prices from the levels of $898/t towards end-April 2022 is another factor raising concerns on price movements in both overseas and domestic markets.

Near-term outlook
Plate prices are likely to remain impacted in the near term by the buying patterns of consumers and the movement of prices on the global platform. Meanwhile, amidst decline in trade prices with each passing week, distributors and traders are expecting support from mills through rebates or discounts.