Indian plate manufacturers announce third price hike in Dec '20

Major plate producing mills announced the third round of price hike in their list prices on the back of an increase in production cost and supply constraints. Towards the beginning of the month, major plate producers had increased their list prices by INR 2,000-2,500/t ($27-34), followed by the second hike of INR 1,500/t ($20) made in the previous week.

New prices are as mentioned below-

• SAIL has announced a hike of INR 750/t in plates today. Effective price stands at INR 49,000/t exy-Mumbai.
  
  
• AM/NS India- The company has raised its list price this week by INR 1,000/t. Revised offer stands at INR 47,500/t exy-Mumbai.
  
  
• JSPL- The company has raised offers by INR 1,500/t hike, pushing the list price to INR 52,000/t exy-Mumbai.
  
  
• The mentioned prices are exclusive of GST @ 18%.
  
  

On the other hand, SteelMint's benchmark assessment for the HR-plate (IS 2062 5-10mm) stands at INR 53,000-54,000/t exy-Mumbai, up by INR 1,250/t w-o-w basis. Price is exclusive of GST @ 18%.

Factors driving plate prices are-

1. Consecutive hikes in the global market- Improved domestic demand in China and overseas markets has led to six weeks of continual increase in heavy plate export offers which now stands at $590-605/t FoB China basis. Thus, China's plate export offers increased by around $50-53/t m-o-m basis. This motivated Indian mills to keep plate prices on the higher side.

2. Resumption in infrastructure activities- SteelMint while acknowledging market reports learned- that recently Larsen & Toubro bagged two major contracts in the infrastructure sector which will provide a boost to the steel industry. The details are mentioned below

- HPCL Rajasthan Refinery, a joint venture between state-run-Hindustan Petroleum Corporation (HPCL) and the government of Rajasthan, is setting up a 9 mn t per annum refinery-cum-petro chemical complex in the Barmer district of Rajasthan. The order may be officially awarded to L&T within a month.

- The National High-Speed Rail Corporation Limited (NHSRCL), implementing the bullet train project in the country, signed a second contract agreement with infrastructure conglomerate Larsen & Toubro (L&T) for the design and construction of the 88 km long (approximately) viaducts between Vadodara and Ahmedabad in Gujarat.

3. Surge in oil prices on increased demand- As per market reports, Chinese and Indian refineries are buying more crude oil than the last month, resulting in an increase in prices. The increased buying comes amid surging refinery rates in China. Meanwhile, in India, a growing number of people are choosing to drive their cars instead of using public transport during the pandemic.

International benchmark Brent crude oil futures increased to $51.38/barrel against $43 levels a month back.

Domestic plate prices are expected to remain strong in Jan '21- SteelMint learns that Indian mills are mulling another price hike by around INR 2,000-2,500/t in Jan '21 keeping in mind the bullish trends and robust demand.