India: Trade-level HRC prices remain range-bound amid need-based buying

The prices of hot-rolled (HR) and cold-rolled (CR) coils at the trade level have predominantly maintained stability within the assessed markets. This sustained equilibrium reflects market sentiment shaped by the widespread availability of more economical domestic alternatives. As a result, trading activities continue to remain subdued, marked by a cautious approach among participants who are primarily engaging in purchasing based on immediate needs.

SteelMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) prices edged down by INR100/t ($1/t) at INR 54,100/t ($651/t) on 16 January, 2024, compared to the previous week. In contrast, CRC (IS513, Gr O, 0.9mm) prices remained stable at INR 62,000/t ($746/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 0.0120354 ; USD 1 = INR 83.0883)

Meanwhile, the weekly assessed hot-rolled plates (IS2062, Gr E250, 20-40mm) prices dropped by INR 200/tonne (t) ($2/t) averaging at INR 61,100/t ($735/t) in the wider range of INR 57,000-64,000 ($686-770/t). The previous week's levels were in the range of INR 57,000-65,000/t ($686-782/t) exy-Mumbai. These prices are on an exy-Mumbai basis and exclude GST at 18%.

Market updates:

1. Cautious market stays range-bound with need-based buying: The market stayed in a range with trade activities being limited to need-based buying at lower price levels only. Sufficient stocks of cheaper domestic alternatives have kept prices in check.

"The market has sufficient stocks of cheaper domestic material which is not letting the prices move up. Whatever deals we are hearing are on lower price levels. With cheaper alternatives being easily available people are moving away from traditional sourcing methods", a market participant opined.

2. Indian HRC export prices decline marginally: The export index for India's Hot Rolled Coils (HRC) with SAE 1006 specification, as reported by SteelMint, witnessed a decline this week, settling at $600/t Free on Board (FOB) at the east coast of India. This represents a decrease from the previous week's figure of $605/t FOB. Notably, the pricing competitiveness of Indian HRC in the Vietnamese market was impacted by compelling offers from China. Meanwhile, the pricing scenario for the Middle East remained consistent w-o-w, with stability attributed to sluggish buying activities in the region.

Driven by a $25/t weekly increase, Indian hot-rolled coil (HRC) exports to Europe (S275, 3mm) are gaining traction. This surge stems from two key factors: persistently high European domestic prices due to increased production costs and a significant price hike (EUR 50/t) announced by a leading European mill, reflecting their own supply constraints.

While European buyers are drawn to the attractive pricing of Indian imports, caution tempers their enthusiasm. Exhausted Q1 safeguard quotas from other countries have restricted overall import volumes, leading to lower than usual booking levels.

3. Imports slow down in December: The bulk HRC and plates imports volumes aggregated at 3,08,721 t in January 2024 (provisional), as per the vessel line-up data tracked by SteelMint. It is appropriately lower than the 5,29,661 t in December 2023.

Outlook:

Trade market prices are likely to stay range-bound with shallow deviation in the near term. Trade channel participants are cautious about procurements in bulk and cheaper alternatives available in the distribution network.