India: Trade-level HR-plate prices up by INR 700/t w-o-w amid demand uptick

Trade level prices of HR-plates have increased by INR 700/t over the week. Demand remains better for HR-plates in the market and there is material offtake.

The current week's assessment for plates (E250, 20-40mm) stands around INR 57,000-58,000/t as against the previous week's INR 56,500-57,500/t. Prices are on an exy-Mumbai basis, excluding GST @ 18%.

Major factors impacting market sentiments

1. Better demand from industrial consumers:
Demand from end-user industrial consumers has improved this month. Heavy and light commercial vehicle segment along with original equiment manufacturers (OEM) has been posing better demand.

For instance, vehicle registration numbers have increased around 8.3% y-o-y in August 2022 to 1,521,490 units, as per the Federation of Automobile Dealers Associations (FADA) data. Out of this, commercial vehicle (CV) registrations increased about 24.1% y-o-y to 67,158 units in August.

Some projects have been awarded recently in the solar and wind power, water and effluent treatments sectors. Also metro and railways are also among active buyers at present. Meanwhile, buyers from pre-engineered buildings (PEB) and heavy fabrication segments are also coming around with requirements, informed sources.

2. Wind turbine manufacturers eye domestic supplies:
After Typhoon Hinnamnore hit South Korea earlier this month, there has been a delay in shipments from the country. "Wind turbine manufacturers and others who had booked imports of plates from South Korea are now looking for alternatives in the domestic market. But since the typhoon struck, mills in Korea will not be able to supply for the next couple of months," a source told SteelMint . This has resulted in improved demand.

3. Restocking activities pick up: Slower inventory replenishment over the past few months amid continual decline in prices has left distributors and traders with limited stocks. Meawhile, over this period, sales kept happening at a steady pace though volumes were not high. Thus, distribution channel participants are now coming up with restocking demand.

"Our order books are a decent levels with steady procurements happening from automobile, PEBs and power and distribution industries over the past few months. Meanwhile, restocking requirements are also flowing in," said sources close to mills.

Near-term outlook: Trade-level plate prices are likely to increase in the near term amid better demand from end-user industries and restocking activities. Furthemore, market participants opine that mills might increase their list prices for plates by around INR 1,000/t for October sales.