India: Mills roll over HRC-CRC list prices for Dec'24 sales

• Few mills offer price support for Nov'24
  
  
• Trade-level prices fail to rise in slack market
  
  

A few of India's major flat steel producers announced a roll-over of their list prices for December 2024 compared with the previous month's closing tag. The effective list prices for HRCs (IS2062, Gr E250, 2.5-8 mm) stood at around INR 47,000-50,150/t ($555-592/t) ex-Mumbai while that for CRCs (IS513, Gr O, 0.9 mm) were at INR 53,200-57,150/t ($628-675/t) ex-Mumbai. Prices are for coil forms, excluding the GST at 18%. Also, a few mills offered price support of about INR 600-1,250/t ($7-15/t) for November 2024 towards the month-end.

The monthly average trade-level price for HRC (IS2062, Gr E250, 2.5-8 mm / CTL) stood around INR 48,100/t ($568/t) exy-Mumbai in November 2024, down by a meagre INR 200/t ($2/t) against the previous month. Similarly, CRC (IS513, Gr O, 0.9 mm / CTL) prices for the month stood at INR 55,200/t ($652/t) exy-Mumbai dropping by the same quantum as HRCs. The HRC prices have been on a continual decline from INR 54,100/t exy-Mumbai in May 2024 and CRC prices from 61,200/t ($722/t) exy-Mumbai in April 2024.

Factors impacting price levels:

Trade offers discounted against mills' list prices: Distributors in the traders' market quoted prices lower than the list prices of the mills amid the limited buying interest amongst end-buyer industries. The trade-level HRC prices reduced by INR 300/t ($4/t) to INR 47,700/t ($563/t) towards end of November compared with the beginning. This was close to the INR 47,000/t ($555/t) seen in early October 2024.

"Negotiations for lower prices for small order volumes have increased with buyers exercising caution while making procurement decisions," said a distributor source from the western part of India. Furthermore, some distributors shared their concerns about difficulties in recovering payments done on credit, adding to their woes.

BigMint's benchmark assessments (bi-weekly) for HRCs (IS2062, Gr E250, 2.5-8 mm) and CRCs (IS513, Gr O, 0.9 mm) stood at INR 47,400/t ($559/t) and INR 54,100/t ($639/t), respectively, on 3 December 2024. These prices are quoted ex-Mumbai, exclude 18% GST, and are for cut-to-length (CTL) deliveries. (INR 1 = USD 84.7203 ; USD 1 = INR 0.0118035)

India's monthly published Manufacturing Purchasing Managers' Index (PMI) stood at 56.5 points in November 2024 down by 10 points from the previous month, as per the HSBC, S&P Global PMI data. This is the lowest point so far this fiscal year. This resonates with the slow momentum of the market.

2. Imports woes continue, exports reduce: The imports of HRC continued to add to the woes of the Indian flat steel stakeholders. India's cumulative import volume based on BigMint's vessel line-up data stood at 571,656 t in November 2024, slightly lower against 687,297 t in October and 776,835 t in September. The volumes arrived till 5 December aggregated to around 40,005 t, while 197,442 t are further expected during the month. The inventory pressure stays high even after the gradual reduction in import volumes from September to November this calendar year.

Meanwhile, exports dropped during the mentioned period raising concerns about the piling up of inventories in the domestic trade channel. Indian HRC exporters are facing challenges from the cheaper Chinese, and Vietnamese alternatives.

Outlook

In the near term, prices are expected to remain range-bound, amid weak demand, liquidity issues, lower export volumes and high inventory levels. Furthermore, the volatility in the manufacturing PMI over the last few months indicates low confidence amongst buyers.