India: Trade-level HR plates prices remain range-bound w-o-w

Trade-level prices of hot-rolled (HR) plates have remained range-bound w-o-w. Better demand from the infrastructure and construction segments has lent support to prices despite buyers displaying caution while procuring in the traders' market.

SteelMint's weekly assessment for plates (E250, 20-40mm) stood at around INR 62,500-63,500/t ($759-771/t) exy-Mumbai. The market has been hovering at this level since the last week of February, as per SteelMint data. (Conversion rate as on 19 April - INR 1 = USD 0.0121448 ; USD 1 = INR 82.3396)

Factors keeping plates prices range-bound

1. Global plate prices soften: Plates prices, which had shown growth over the last couple of months, have started dropping off. For instance, Chinese heavy plates (SS400, 14-20mm) prices have declined by about $25/t to around $665/t FOB as per the last assessment on 18 April from the levels of $690/t FOB assessed on 15 March. The volatile Chinese ferrous futures market and slow overseas demand are weighing on Chinese plate prices.

This scenario, in turn, has made buyers more cautious about buying in bulk quantities in the Indian domestic traders' market.

2. Good pace of infrastructural development: Infrastructure and construction, which enjoys the lion's share in steel consumption, contributed heavily towards keeping prices stable. The segment continued to perform at a better rate in 2022-23 (FY23). In FY23, a stretch of 8,064 km of national highways was added to the network till February, as per data released by the Ministry of Road Transport and Highways (MoRTH). Moreover, 3,298 km of highways have been constructed in the last three months with 1,261 km added in February alone.

Although slow compared to the pace of construction of 37 km a day in FY21 and 30.1 km in FY22, roads have continued to support steel consumption.

3. Constrained supplies in domestic market: Apart from the decent supplies from the PSU major, the traders' market is bearing the brunt of low allocations from private steel producers AM/NS India and JSPL. This is another reason why the prices have sustained the momentum. Moreover, the list price of plates (E250, 20-40mm) from the private mills stands elevated at INR 69,000/t ($840/t) exy-Mumbai for April sales. However, that of the PSU major has been increased by INR 1,250/t ($15/t) to INR 65,250/t ($794/t) exy-Mumbai w.e.f 1 April. (conversion rate as on 1 April- 1 INR = 0.121751 USD; 1 USD= INR 82.135)

Mills' inclination towards supplying to projects on a long-term contract basis has led to a scenario where they enjoy a major share of the market while small merchant players have scope for only limited sales, informed a major distributor source.