India: Stainless steel prices continue to fall due to lower demand as fiscal year-end approaches

Domestic stainless steel prices in India continued the declining trend this week too. Prices of 304-grade hot-rolled coils (HRCs) fell by INR 10,000/tonne ($121/t) w-o-w to INR 215,000/t ($2,601/t) exw, while domestic 304-grade scrap prices remained stable w-o-w at INR 128,000/t ($1,548/t) ex-Delhi.

The three-month nickel futures on the London Metal Exchange (LME) also dropped by around 15% m-o-m and are hovering at around $22,730/t. Meanwhile, ferro molybdenum prices corrected by around 3.7% w-o-w. Notably, nickel and ferro molybdenum are the key raw materials used in stainless steel production.

Market overview

The stainless steel scrap market performed well in the first half of March, but witnessed less activity in the second half as the financial year-end is nearing. Imported scrap prices into the country were in the range of $1,530-1,550/t while Chinese mills were bidding at $1,490-$1,500/t for 304-grade, and around $2,900/t for 316-grade. Demand for 316 scrap was stable and trade was happening at INR 242,000-243,000/t despite the drop in nickel and molybdenum prices on the LME.

Meanwhile, the finished stainless steel segment saw a steep correction in prices, with HRC/CRC 304 -grade and 316-grade witnessing a fall of INR 8,000-10,000/t. According to a Mumbai-based dealer, March is a difficult month for sellers, but price recovery is expected after the second week of April.

Ferro chrome prices down w-o-w

Indian ferro chrome (HC60%) prices decreased by INR 3,000/t w-o-w to INR 115,800/t exw-Jajpur due to weak demand in both the local and international markets. Majority of buyers are waiting for further price drops, and increased production in China has also dampened demand for Indian ferro chrome.

Meanwhile, domestic ferro molybdenum prices fell to 3.7% w-o-w. Prices of FeMo 60% material stood at INR 37,55,000/t ($45,401/t).

Outlook

Overall, domestic stainless steel demand was stable this week, but approaching fiscal year-end has resulted in lower demand and price drops. Market participants are expecting demand to recover in mid-April.