India: Primary mills likely to roll over end-Feb'24 HRC list prices for Mar'24 sales

• Mills likely to rollover HRC-CRC list prices for Mar
  
  
• Coking coal offers down m-o-m, iron ore edges Feb
  
  
• Bulk HRC, plate exports rise in Feb; lend support
  
  

Indian primary flat steel producers are mulling a rollover of their end-February HRC and CRC list prices, for March 2024 sales. This can be a spin-off of the lack of enthusiasm among end-buyers which has kept trade-level prices under check and restricted any upside movement.

The list prices of HRCs (IS2062, Gr E250, 2.5-8mm) are thus likely to be at INR 54,500-56,000/t ($657-676/t) ex-Mumbai whereas those of CRCs (IS513, Gr-O, 0.9mm) will hover at INR 59,000-62,000/t ($712-748/t) ex-Mumbai in March 2024, reliable industry sources hinted. Moreover, distributor network participants are awaiting clarity on the price support for February 2024. However, indications for the same have remained elusive from the mills' side.

At the trade level, there has been a slight downturn in prices for hot-rolled (HR) coils. BigMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) prices decreased by INR 500/t ($6/t) to INR 53,100/t ($/641t) on 5 March 2024, compared to the previous week.

On similar lines, CRC (IS513, Gr O, 0.9mm) prices fell by a meagre INR 200/t ($2/t)to INR 61,300/t ($740/t) during the same period. These prices are quoted exy-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries. (INR 1 = USD 0.012077; USD 1 = INR 82.8022).

Concurrently, the assessed prices for hot-rolled plates (IS2062, Gr E250, 20-40mm) exhibited stability and averaged at INR 60,500/t ($730/t) within the broader range of INR 57,000-63,000/t ($688-760/t). These prices are quoted exy-Mumbai, excluding 18% GST.

Factors affecting the market

1. Volatile raw material prices: The basic steel-making raw material prices have also shown signs of weakening. Offers for the imported, Australian-origin premium hard coking coal (HCC) declined by $20/t m-o-m to $330/t CNF Paradip, India towards the end of February 2024 against $350/t in the previous month. However, monthly average price of fines on the Odisha iron ore index (0-10mm, Fe 62%) stood at INR 5,680/t ($63/t) ex-mines in end-February 2024, up marginally by INR 20/t ($0.24/t) against the previous month's closure of INR 5,660/t ($68/t).

2. HRC, plates exports pick up pace: Bulk HRC and plates export volumes rose to 6,42,422 t in February 2024, 40% m-o-m higher than 4,58,120 t in January 2024, as per the bulk vessel line-up data maintained with BigMint. In the first week of March 2024 plates exports were at 2,16,438 t.

However, HRC offers from India have edged down marginally. BigMint's India HRC (SAE 1006) export index, focused on the Middle East and Vietnam, averaged at $597/t FOB east coast India (down $4/t, m-o-m) in February2024. The same had averaged at around $601/t FOB in the preceding month.

Also, India HRC (SAE 1006) export offers to Europe averaged $707/t CNF Antwerp, (down $5/t, m-o-m) in February 2024. The same had averaged $712/t CNF Antwerp in the preceding month.

3. Market feels pressure of low trade volumes: Limited trading activity continues to plague the market, driven by ongoing liquidity concerns and heightened price sensitivity among buyers. The buzz about rollover of list prices by the mills has not created much impact as people have anticipated price support for the previous month in the form of rebates.

"Demand is severely lacking due to liquidity issues. Further, buyers have been weighed down by the financial year closure that demands account reconciliations. While mills have rolled over prices, the market is awaiting their price support announcements," informed a market participant. Market sentiments are not likely to improve and thus these price levels may remain in force for some time, he added.

Outlook

Financial book closures in the fiscal year-end, and elections ahead are likely to keep trade-level prices range-bound for the current month. Improvement in exports will lend some support but might not have a greater impact on domestic prices.