India: Trade-level HRC prices stable; need-based buying weighs on market

Trade-level prices of hot-rolled (HR) coil and cold-rolled (CR) coil have held steady across markets this week. Overall trading activity remains sluggish, as cautious market participants predominantly prioritised need-based buying.

BigMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) remained stable at INR 53,500-54500/t ($649/t) on 13 February compared to the previous week. CRC (IS513, Gr O, 0.9mm) prices were unchanged at INR 61,500-62,500/t ($741/t) during the same period. These prices are ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries. (INR 1 = USD 0.0120151 ; USD 1 = INR 83.2288)

Assessed prices for hot-rolled plates (IS2062, Gr E250, 20-40mm) on a weekly basis exhibited stability, averaging at INR 61,100/t ($735/t) within the broader range of INR 57,000-64,000/t ($686-770/t). These prices are quoted ex-Mumbai, excluding 18% GST.

Market updates:

1. Domestic trade-level prices stable: Market activity remains subdued, characterised by predominantly need-based buying, industry sources suggest. Liquidity concerns and price sensitivity among buyers continue to weigh down overall engagement. Additionally, influx of imports puts further pressure on price points, limiting upward movement.

2. Indian HRC export prices range-bound: BigMint's India HRC (SAE 1006) export index for the Middle East and Vietnam dipped to $587/t FOB, down from $599/t FOB east coast India, reflecting weakened global market sentiment. The Lunar New Year and Tet holidays in China and Vietnam led to reduced demand, slowing trading activity.

Meanwhile, Indian HRC export offers to the European Union decreased by $10/t w-o-w to $705-710/t CFR Antwerp, impacted by sluggish domestic demand and buyer hesitancy amidst market uncertainty.

3. Inflow of imports: India's imports of bulk hot-rolled coil (HRC) and plates were at 2,19,655t till 10 February, according to provisional vessel line-up data tracked by BigMint. Total import volumes reached 6,60,344 t, in January 2024 marking a significant rise from 5,29,661 t in December.

Outlook:

Trade-level prices are expected to stay range-bound despite mills increasing their February 2024 tags. Liquidity crunch, influx of imported products along with the improvement in domestic supplies from mills in the traders' market are weighing on prices. Industry participants, especially buyers, are still cautious about the future movement of prices, keeping trade activities restricted to urgent requirements.