India steel index continues to trend down as market battles weak demand

• Buyers reject list price hikes for BF rebars, HRCs
  
  
• Mills withdraw HRC export offers amid dull trades
  
  
• Total HRC imports may edge down m-o-m in Jan
  
  

Morning Brief: BigMint's India Steel Composite Index slipped 0.2% w-o-w to 127.9 points on 17 January 2025 as the market faced another listless week, marked by dull demand. Notably, the index had also dipped in the week ending 10 January, by 0.7% w-o-w.

Both the longs and flats sub-indices inched down in the latest assessment. HR plates and structure steel were the only categories that saw positive shifts.

Factors that impacted the index last week

HRC mills' price hikes fail to lift trade tags: Prices of hot-rolled coils (HRCs) and cold-rolled coils (CRCs) were flat w-o-w at INR 46,500-48,600/tonne (t) ($537-561/t) and INR 53,500-57,000/t ($618-658/t), respectively, in the trade segment.

Two factors influenced HRC tags this week: First, due to sluggish demand, buyers largely opposed mills' list price hikes for January. Secondly, the winter harvest festivals, including Makar Sankranti, Lohri, and Pongal, led to a suspension in trade activities in many regions. Amid dull market sentiments, traders took a break to soak in the festive spirit.

According to a source, the buzz around safeguard duty has died down, and future market movements are expected to hinge on changes in demand.

BF rebar prices drop as caution prevails: Blast furnace (BF) rebar prices dropped by INR 300/t ($3/t) w-o-w to INR 52,200/t ($603/t) exy-Mumbai, exclusive of GST at 18%.

Buyers shrank from engaging in transactions due to uncertainties over the future direction of the market. Consequently, traders shaved off prices to nudge buyers to shed their caution. Secondly, BF mills' list price hikes for early January made no impact on the market.

In the project segment, prices were flat w-o-w, at around INR 49,500-50,500/t ($572-583/t) FOR Mumbai, as end-user demand remained slack.

Slow buying drags down IF rebar prices: Induction furnace (IF) rebar trade prices edged down w-o-w, though the Mumbai cluster, the key hub for trade in IF rebar, saw stable prices at INR 47,000/t ($543/t) exw.

Manufacturers, intent on liquidating material, pared list prices and offered discounts to lure buyers. Inventory idling time hovered at 10-12 days.

HRC imports show possible downtrend m-o-m: India's imports of bulk HRCs and plates stood at 189,176 t till 16 January, as per vessel line-up data maintained with BigMint. An additional 120,772 t are expected to arrive by the month-end. The volume expected so far comes to around 310,000 t, indicating that the total this month can be lower than 473,222 t received in December.

Mills retreat from HRC export market: India's HRC export offers to Europe and the Middle East held steady w-o-w. Mills have stepped back from actively offering in both markets due to (1) mounting pressure from aggressive Chinese pricing tactics and (2) limited activity in the European market, stemming from concerns over ongoing anti-dumping duty investigations and geopolitical uncertainties.

The last heard indicative offers were at around $530-535/t CFR UAE for the Middle East and $590-595/t CFR Antwerp for Europe.

Last week, Chinese HRC exporters trimmed their offers to counter softening demand. Offers to the Middle East stood at $485-490/t CFR UAE, down by $10-15/t w-o-w, while those to Vietnam fell by $15/t w-o-w to $475-480/t CFR Ho Chi Minh City.

Outlook

Prices are expected to be at the same level, with slight variations expected. Further corrections may be possible, as demand continues to be poor and supportive factors remain absent.

India Steel Composite Index

The India Steel Composite Index is assessed on a weekly basis, every Friday at 18:30 IST, as per the weighted average prices based on manufacturing capacity and production.

BigMint considers the Composite Index with the base year being 3 January 2020 (financial year 2019-2020) and the base value as 100. The Composite Index does not give the absolute price but a trend of the market. The Indian steel industry is broadly classified into the BF-BOF and the electric/induction furnace routes. Keeping this broad classification in view, BigMint proposes to release the Composite Index by considering both production routes by manufacturing capacity and the production weighted method to compute the index for India.