Why Is Indian Flat Steel Market Slow?

The market for Flat Products has remained sluggish with limited enquiries and slow procurement from end consumers. Despite the anticipation of a price correction by distributors, major mills have kept offers unchanged. In this article, we will examine the current state of the Flat Steel market and its outlook for the future.

Factors Affecting Market Performance

• Unchanged Offers From Major Mills- Hot-Rolled Coil offers from major mills have remained steady, with prices at around Rs. 59,500/ton ex-yard Delhi/NCR, Rs. 61,000/ton ex-yard Mumbai and Ahmedabad, and Rs. 59,500/ton ex yard Kolkata. Offers for Chennai and Hyderabad stood at Rs. 62,000/ton and Rs. 62,300/ton on an ex-works basis, respectively.

• Flat Steel Products’ Low Demand- The demand has remained on a downtrend. Consumers have started procurement slowly based on their immediate requirements. HRC demand in both domestic and international markets is still weak, with Chinese mills offering material at cheaper prices. Local customers are waiting for a downward correction in prices, leading to delayed procurement.

Increase In Steel Imports Becoming A Major Challenge For Indian Mills

India’s steel imports, including finished and semi-finished steel, increased by over 45% YoY to 7 million tons, one of the highest increases in the last three years. Finished steel imports rose by 30%, with Russia among the top five Hot-Rolled Coil and Strips suppliers to India, replacing traditional suppliers like Japan, China, and Vietnam in FY23. After Korea, which supplied 0.84 million tons in the sub-category, Russia was second with 0.23 million tons of supplies.

Market Outlook

The Flat Steel Products market seems less likely to stay supported, as Chinese mills offer HR Coils at very competitive prices, impacting the demand for HR Coils in the international market. Meanwhile, plants are scheduling capital repair to revamp facilities in the new financial year, leading to supply concerns for PM Plates and limited availability in the spot market. Due to pending orders on mills, the price for PM Plates is expected to remain steady. It is predicted that the HRC market may see further downward trends during May 2023, with prices likely to fall further.

OFB’s Insight

The Flat Products steel market was slow with limited demand despite expectations of a price correction, and major mills kept their offers unchanged. Increased Steel imports have raised serious concerns among Indian mills and in the domestic market. Also, plant maintenance raised supply challenges for PM Plates. The market outlook is uncertain, and the HRC market is predicted to continue downward trends in May.

Read more: Week 17 Of 2023: Is Indian Steel Market Witnessing A Low Response?

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