Indian mills raise HR plate list prices by INR 1,500/t ($18/t); trade-level stays range-bound

Major Indian plate producers announced an increase of around INR 1,500/t ($18/t) in their list prices of hot rolled (HR) plates with effect from 1 March 2023. Elevated raw material prices, decently filled mill order books and strong global prices are among the reasons behind this hike.

Subsequent to the hike, list prices of HR plates (E250, 20-40mm) now stand at around this:

• SAIL: INR 64,000/t ($777/t)
  
  
• AM/NS India: INR 69,000/t ($838/t)
  
  
• JSPL: INR 69,000/t ($838/t)
  
  
• Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
  
  

However, the scenario in the traders' market remained lacklustre. Trade level prices remained range-bound in the current week's assessment for plates (E250, 20-40mm) at INR 62,500-63,500/t ($759-771/t) exy-Mumbai, excluding GST at 18%.

Supply tightness due to improved exports to European markets over the past couple of months failed to boost trade-level prices. Low buying interest of end-users in the unorganized sectors weighed on price directions.

Factors driving up list prices:

1. Raw material prices: SteelMint's monthly average Odisha iron ore fines (Fe 63%, 0-10mm) index stood at around INR 5,813/t ($71/t) ex-mines in February, up by INR 425/t ($5/t) from that in January. In December 2022, there was a steeper incline of INR 1,153/t ($14/t) in comparison to INR 4,660/t ($57/t) ex-mines. Prices mentioned are inclusive of royalty (15%), DMF (4.5%) & NMET (2%), but exclude GST at 18%.

Similarly, the monthly average prices of imported Australian-origin premium hard coking coal (HCC) have also surged over the last two months. In February, premium HCC (Australian origin) averaged at $382/t CNF India, rising $54/t over January. The same surged by about $104/t against $277/t CNF in December 2022, as per SteelMint data.

Elevated raw material prices pushed mills to go for a price increase in March.

2. Improved project demand: Government infrastructure projects and large-scale constructions have driven demand for plates. Improved demand from other heavy engineering industries like shipbuilding, green energy, automobiles, and original equipment manufacturers also helped.

MoRTH data indicated the highway network is getting a push from the PM Gati Shakti projects. Wind power is a major consumer of plates. The Make in India drive has helped improve consumption of domestic products, highlighted a source.

Projects that are active or near completion in both transport and power infrastructure will continue to drive up demand. Indian Railways has also been adding new coaches to its fleet or upgrading existing capacity and this is another avenue for generating demand for plates.

3. Strong performance of plates on global platform: Plate prices globally have continued to remain strong. For instance, the Chinese heavy plate (SS400, 14-20mm) stood at around $680/t FOB by end-February, up by $70/t from January beginning, as per SteelMint records. This was up by a steeper $130/t from the levels of $550/t in early December 2022. Good overseas trade exposure and a gradual increase in plate export prices helped Indian plate producers as well. A few major private mills now hold good export orders until March shipments. The PSU steel major has secured multiple export orders for special-grade plates from Europe for delivery in March and April, as per the company's tweets.