India: Trade-level HR plate prices remain largely rangebound amid supply constraints

• HR plate prices remain range bound w-o-w
  
  
• Supply squeeze prevails amid demand from projects, exports
  
  
• Slow buying interest seen in traders' market
  
  
• Strong global prices to keep domestic prices supported
  
  

Trade-level prices of HR plates (E250, 20-40mm) in the Mumbai region have remained largely rangebound with a minor drop of INR 300/t ($4/t) w-o-w. Most distribution network participants refrained from reducing their offer prices amid disrupted supplies from a few mills. However, participants are concerned about slow buying interest.

SteelMint's weekly assessment for plates (E250, 20-40mm) stood at around INR 61,500-62,500/t ($744-756/t) exy-Mumbai on 16 February, 2023.

On the other hand, weekly prices for hot strip mill (HSM) plates (E250, 5-10mm) dropped by a steeper INR 1,500/t ($18/t) to INR 58,500-59,500/t ($707-720/t) exy-Mumbai, taking a cue from the decline in hot rolled coil (HRC) prices.
(INR 1 = USD 0.012094 ; USD 1 = INR 82.6859)

Factors keeping HR plate prices rangebound:

1. Mills raise prices for Feb: Major plate producers had announuced an increase in prices towards the end of the first week of February. Producers are mostly concerned about elevated prices of iron ore and coking coal. Moreover, the removal of 15% export duty on non-alloyed clad or plated flat steel products on 19 November has opened up export avenues. These were the key reasons behind mills raising prices since the beginning of 2023.

Subseqent to the annonucement for February sales, the list prices of plates (E250, 20-40mm) were:

• SAIL: INR 62,500/t ($756/t)
  
  
• AM/NS India: INR 67,000/t ($810/t)
  
  
• JSPL: INR 67,000/t ($810/t)
  
  
• Prices mentioned are on an exy-Mumbai basis, excluding GST at 18 %.
  
  

2. Export opportunities, infrastructure development: Export opportunities have increased post the removal of export duty. "A few mills have booked decent quantities for exports in December till early February. Their order books are mostly filled until mid-March," a major distributor source based in western India informed.

Meanwhile, infrastructure development is gathering pace. There have been significant additions in the domestic national highway network in December (1,008 km) and January (1,029 kms) of this fiscal year. The construction of highways aggregated 6,803 km from April 2022 to January 2023, higher by 119 km as against 6,684 km in the same period of last fiscal year.

On the green energy front, there have been further additions in solar and wind power generation capacities. In January, the installed capacity for solar energy increased by 591 megawatts (MW) m-o-m to 63,894 MW. Capacity increased by 13,590 MW y-o-y. Similarly, 53 MW of wind power capacity was added m-o-m raising it to 41,983 MW, and 1,882 MW has been added since January 2022.

These sectors shall continue to drive demand amid the government's drive towards green energy and infrastructure development, sources highlighted.

3. Rising global plate prices: Global plate prices have sustained an upward momentum since they started rising in early December. Export prices of Chinese-origin heavy plates (SS400) stood at $580/t (INR 47,960/t) FOB on 8 December, as per SteelMint data. Prices rose by $90/t (INR 7,440/t) to $670/t ($55,400/t) FOB on 15 February - an increase of about $35/t (INR 2,890/t) since end January.

Moreover, Chinese steel major Baosteel has increased its domestic plate prices by around RMB 300/t ($44/t) for March 2023 sales a few days ago.

Near-term outlook:
Trade market prices are anticipated to increase in the near term amid anticipation of further improvement in demand from the major plate-consuming industries including automotive. Higher raw material prices and firm global prices might lead to a price hike by mills, sources opined. Moreover, market participants are eagerly awaiting an improvement in sales activities in the traders' market with the financial yearend around the corner.