India: Trade-level HRC, CRC prices fall by up to INR 800/t in Jan'24 amidst imports and domestic alternatives

The average prices of trade-level hot-rolled coils (HRCs) have experienced a m-o-m decline, decreasing by approximately INR 800/t to reach INR 54,300/t exy Mumbai in January 2024 against previous month's figure of INR 55,100/t exy-Mumbai. Concurrently, cold-rolled coils (CRCs) have seen a marginal decrease of INR 400/t on a m-o-m basis, settling at INR 62,000/t in January 2024, compared to the preceding month's INR 62,400/t exy-Mumbai.

In the plates segment, monthly average price of HR plate (Gr-E250, 20-40mm) has dropped a steeper INR 2,100/t m-o-m to INR 61,300/t in January compared. End-industrial buyers continued to exercise caution and procured on need basis owing to the pressure exerted by cost-effective domestic options and imports during the month.

One among the major flat steel manufacturers, SAIL has announced an increase of INR 500/t for February 2024. However, considering the low sentimental buoyancy in the traders' market during January 2024, the manufacturer has offered rebates. Post- the announcement, list price of HRC (IS20262, Gr- E250, 2,5-8mm) stands at INR 55,000-55,500/t exy-Mumbai and those of CRC (IS513, Gr-O, 0.9mm) at INR 60,500-61,000/t exy-Mumbai. The prices mentioned are for full coils, excluding GST at 18%.

As of January 30, 2024, BigMint's bi-weekly benchmark evaluation for Hot Rolled Coils (HRC) (IS2062, Grade E250, 2.5-8mm), stood steady at INR 54,000/t ($664/t), maintaining consistency with the preceding week's rates. Meanwhile, Cold Rolled Coils (CRC) (IS513, Grade O, 0.9mm), witnessed a price upturn of INR 300/t, reaching INR 62,000/t ($755 per ton) during the same period. (INR 1 = USD 0.012015 ; USD 1 = INR 83.229)

However, weekly assessed HR- Plates (Gr-E250, 20-40mm) prices maintained the average at INR 61,100/t ($/t) exy-Mumbai, and ranged between INR 57000-64000/t ($/t) exy-Mumbai. The prices mentioned above exclude GST at 18%. This marks the third week of stagnation in the price level. The inflow of demand from projects especially from infrastructure and civil construction segment continued to keep the selling pressure off of the private mills, informed a few industry participants. The demand has not waned off but has shifted from the traders' market to Business-to-Customer (B2C) sales for mills, said a distributor source.

Market updates:

1. Domestic trade-level prices remained stable: The trader's market experienced need-based buying activity this month. An excess supply of materials emerged due to easy availability, while a surge in foreign material added to the buyers' concerns. Thus, the latter has been exercising caution while purchase negotiations and the bargaining activity is on a rise, hinted distributor sources from the north.

The chatter about mills to increase their list prices did not help much in elevating the market sentiments.

"The market is expected to remain stable for a while, given the abundance of materials at lower rates and a significant influx of imports. This has led end-users to seek more discounts. Additionally, liquidity issues are prevalent, prompting those in need of liquidity to sell at discounted prices," shared a distributor based in the west.

2. Indian HRC export prices remain stable: BigMint's India HRC (SAE 1006) export index, covering the Middle East and Vietnam, remained unchanged this week at $600/t FOB east coast India, reflecting limited global market activities.

Indian steel mills upheld consistent offers to the Middle East at $635-640/t CFR, with a notable 20,000t HRC booking by a major Indian mill. HRC prices to Vietnam held steady at $615-620/t CFR, while Chinese HRC offers were noted at $600-610/t CFR. In Europe, Indian HRC exports (S275, 3mm) remained at $720-725/t CFR Antwerp, with a reported 20,000t deal at a similar price level.

3. Imports rise above December 2023: The bulk HRC and plates imports volumes reached 586,451 t in January 2024 (provisional), as per the vessel line-up data tracked by BigMint. It has surpassed the December 2023 figure of 529,661 t.

Outlook:

Private flat steel manufacturers have not yet disclosed their list prices for February. However, industry discussions suggest a potential increase of INR 1,000-1,250/t from these mills, attributed to the easing cost burden resulting from rising raw material prices. Meanwhile, there is uncertainty regarding any rebates or price support for January 2024. Market prices for Hot-Rolled Coils (HRC) and Cold-Rolled Coils (CRC) by traders are expected to remain within a certain range in the coming weeks, influenced by the availability of more affordable domestic and imported alternatives.