India: Trade-level HRC prices fall by up to INR 500/t, plates remain stable

Trade-level hot-rolled coils (HRCs) prices have dropped by up to INR 500/t ($6/t) w-o-w. However, those of cold-rolled coils (CRCs) coil remained range-bound w-o-w in the market under assessments. Whereas, the hot-rolled plates prices have transitioned smoothy through the last three weeks.

Trading activity in the market remained subdued this week, as participants cautiously awaited the price announcements from mills with the year-end festivities round the corner. Additionally, the presence of cheaper imports available in the market of the previous bookings kept the buyers vary of the operating trade-level prices.

SteelMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) prices held steady at INR 54,500/t ($655/t) on 26 December, 2023, compared to the previous week. In contrast, CRC (IS513, Gr O, 0.9mm) prices declined by INR 300/t ($4/t)to INR 62,200/t ($748/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 0.0120236 ; USD 1 = INR 83.1698)

Meanwhile, the weekly assessed hot-rolled plates (IS2062, Gr E250, 20-40mm) prices continued to hover at around INR 63,400/t ($762/t) in the wider range of INR 59,500-67,000 ($715-806t), maintaining a three week streak. Consistent flow of project orders have mostly favoured the private mills on the demand side, whereas the buyers in traders' market continued to shy away from making bulk purchases, informed credible industry sources. These prices are quoted ex-Mumbai, excluding 18% GST. (INR 1 = USD 0.0120236 ; USD 1 = INR 83.1698)

Market updates:

1. Cautious market awaits mill prices amid festive slowdown: Trading activity remained subdued this week, characterized by need-based buying as participants cautiously await the January 2024 list price announcements from mills. The Christmas and fast approaching New Year holidays further contributed to a festive lull, with many activities postponed until next month.

Firstly, an influx of imported materials over the past 2-3 months created an excess supply in the market. Secondly, mills prioritized domestic sales over exports, potentially for a better price realization. Finally, increased availability of competitively priced domestic materials along side cautious sentiment and expectation of lower prices in traders' market likely resulted in limited buying. However, despite the above factors impacting trading volumes across the market, prices have remained resilient and avoided any steep deviation since the beginning of the December 2023.

2. Indian HRC export prices remain stable: The Indian HRC export market fell silent this week, enveloped by the ongoing Christmas and upcoming New Year festivities. The last reported offers hovered around $695-700/t CFR Antwerp, reflecting muted trading sentiment.

Adding to the subdued activity, domestic prices in the EU climbed last week, further discouraging buying interest. As the market approaches its winter holiday hiatus at the end of this week, trading is expected to remain slow.

Moreover, export offers for Southeast Asia and the Middle East (ME) market continued to be on hold from Indian mills.

3. Imports slow down in December: The bulk HRC and plates imports volumes aggregated at around 4,53,787 t in December 2023 (provisional), as per the vessel line-up data tracked by SteelMint. It is appropriately lower than the 10,85,033 t in November 2023, but is closer to the 5,84,999 t in October 2023. Possibilities are that the final figures for December could edge further close to October figures, but are likely to stay low in initial few months of 2024, opined a few distributor sources.

Outlook: Market participants are awaiting upcoming price announcements from mills, which are expected to have a significant impact on future market activity. Additionally, the presence of readily available and cheaper substitutes is anticipated to dwindle over time, contributing to a potential stabilisation of the market in the near future. SteelMint estimates trade level prices to sail smoothly in the near term and avoid any rapid change.