India: Trade level HRC prices decline marginally; moderate demand amid price pressure from imports

At the trade level, there has been a slight downturn in prices for hot-rolled (HR) coils. In contrast, cold-rolled (CR) prices have remained stable in the assessed markets. The market has shown resilience to the mills' efforts to raise list prices, as the trading sector continues to experience sluggishness and operates at discounted levels compared to the listed prices.

BigMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) prices decreased by INR200/t ($2/t) to INR 53,800/t ($650/t) on 20 February 2024, compared to the previous week. Also, CRC (IS513, Gr O, 0.9mm) prices were unchanged at INR 61,600/t ($744/t) during the same period. These prices are quoted ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries. (INR 1 = USD 0.012077 ; USD 1 = INR 82.8022)

Concurrently, the assessed prices for hot-rolled plates (IS2062, Gr E250, 20-40mm) on a weekly basis declined by INR 500/t ($6/t) t0 INR 60,600/t ($732/t) within the broader range of INR 57,000-63,000/t ($688-761/t). These prices are quoted ex-Mumbai, excluding 18% GST.

Market updates:

1. Moderate domestic trade-level market activities: Limited trading activity continues to plague the market, driven by ongoing liquidity concerns and heightened price sensitivity among buyers. This sluggishness is further exacerbated by the influx of imports, which puts downward pressure on prices and restricts any upward movement.

Mills might try aligning their list price tags with those of the former, opined a few industry sources. Also, participants are now keenly awaiting the mills announcement for March 2024 sales.

"Demand is severely lacking due to liquidity issues. While mills are pushing for sales, the overall sentiment leans against purchasing higher-priced material due to razor-thin margins. Immediate relief from these conditions is not anticipated," informed a market participant.

2. Indian HRC export prices remain stable: BigMint's India HRC (SAE 1006) export index for the Middle East and Vietnam held steady at $597/t FOB east coast India.

While offers to the Middle East remained unchanged at $630-635/t CFR, exports to Europe (S275, 3mm) declined by $5/t w-o-w, now around $700-705/t CFR Antwerp. Europe's HRC market faces sluggish demand, prices at EUR 700/t ex-works ($756/t), and importers' hesitation due to long lead times and domestic availability. The Indian HRC export market has slowed after Q1 quota exhaustion.

3. Imports rise in February 2024: India's imports of bulk hot-rolled coil (HRC) and plates were at 3,13,235t till 19 February 2024, according to provisional vessel line-up data tracked by BigMint. Total import volumes reached 6,60,344t, in January 2024 while it was 5,29,661t in December 2023.

Outlook:

The continued imports are exerting constant pressure on prices. The rising liquidity concerns and growing inventory levels are going to keep the pressure on the prices.