India: HR plate trade prices up by INR 800/t ($10/t)

Indian hot-rolled (HR) plate trade prices (E250, 20-40 mm) increased by INR 800/t ($10/t) to INR 57,500-58,500/t ($695-707/t), exy-Mumbai, excluding GST at 18% as on 22 December 2022. Prices have increased on an improved overseas offers and concerns over availability of slabs.

Factors keeping trade prices elevated:

1. Slabs availability a concern: The availability of slabs has remained a challenge for most part of the calendar year 2022. There were hardly any imports in the April-June period, while 83,412 t of slabs were imported over July-November, 2022, as per the vessel line-up data maintained with SteelMint. Furthermore, exports of slabs also dropped by 30% y-o-y in April-November of FY23 as the domestic market was facing shortage.

SteelMint understood from market sources that the supply of slabs from Russia to the European Union (EU) is likely to reduce next year due to the eighth package of sanctions imposed in response to Russia's invasion into Ukraine. This package includes ban on steel imports from Russia, which has given a quota of 3.75 mnt per year of slabs to enter into EU from transition period between 7 October 2022 to 30 September 2024. In CY21, Russia's slab exports to the EU were recorded at 3.98 mnt, as per the data from International Steel Statistics Bureau (ISSB).

Also, sanctions might be imposed against one of the leading Russian slab producers and exporters, highlighted some of the industry sources.

As a result, reduction in slab supplies from Russia has disturbed material availability in the global market.

2. Global plate offers rise: Plate offers in the global platform have increased during the month. For instance, Chinese-origin HR plate (SS400) export offers have registered an increase of $26/t m-o-m to a monthly average of $583/t FOB China in December 2022, as compared with $558/t FOB a month ago. Offers for January and February 2023 shipments have increased with ease in government's Covid-19 policy. Furthermore, market participants' expectations of an improved steel demand will keep export offers supported in the near-term.

3. Demand from end-user stays supported: The end-user demand remained supported in November. For instance, there was an addition of 706 km to the national highway (NH) network in November 2022, as per the data released by Ministry of Road Transport and Highways (MoRTH). This is higher by 245 kms against the construction of 461 km seen in the previous month and by 38 km from 668 km in November 2021. In fact, this is the second highest addition in this financial year, the highest one was 729 km in April 2022.