The Indian Stainless Steel market is showing remarkable resilience, bolstered by robust domestic demand, import challenges, and increasing raw material costs. Industry experts foresee a promising future for the sector, even as prices experienced a significant surge in recent weeks.

Contributing Factors

Let’s into the factors contributing to the strength of the Indian Stainless Steel market.

August’s Price Surge: In August 2023, Stainless Steel prices in India saw a remarkable surge, with some grades and series witnessing an uptick of up to Rs 22,000/ton ($265). Despite this rapid price escalation, major players in the Indian Stainless Steel industry, including Jindal Stainless and Rimjhim Ispat, already announced a price hike of Rs 3,000/ton for SS 200 series products in September 2023 and a further hike of roughly Rs 10,000-15,000/ton is expected soon.

This increase marked the first of its kind in September, and experts believe it won’t be the last. The industry is poised for further price hikes as Stainless Steel producers aim to maximize profits amid the limited availability of materials.

Demand Drivers: Several factors are driving the strong Stainless Steel demand in India. The ongoing festive season has sparked increased consumption, and the upcoming global festivals like Christmas and New Year further augur well for the industry. These factors are particularly boosting demand in sectors like households and automotive, where Stainless Steel coils, especially the SS 304 and 316 series, are highly sought after.

Additionally, the implementation of Bureau of Indian Standards (BIS) certificates for SS 200 series imports has posed challenges for imports, contributing to higher prices for this series.

There may also be substantial shortages in specific sizes of SS 200 series, particularly those typically imported from China like Color Sheets and thin gauge coils. For containers held up in customs, re-export could be the only viable option due to the mandatory requirement of a BIS license for all 200 series.

Raw Material Prices: The cost of raw materials plays a pivotal role in shaping the Stainless Steel market. Crucial raw materials’ prices including imported scrap of 304 bundled grade, have surged by approximately 8 to 10% in just one month, with current offers hovering around $430-433/ton CFR India.

Furthermore, global prices for essential raw materials like ferrochrome, ferromolybdenum, and nickel pig iron remain strong. These global trends are not only fueling the Stainless Steel market domestically but also causing price surges in India due to increased import costs.

Market Outlook

The Indian Stainless Steel market is poised for continued strength, buoyed by strong domestic demand and import challenges. Despite recent price surges, further hikes are anticipated, driven by robust demand during the festive season and global price trends of key raw materials.

OFB’s Insight

The Indian Stainless Steel market continues to exhibit strength, driven by rising domestic demand, import challenges, and surging raw material costs. The recent price hikes and ongoing festive season suggest a positive outlook for the sector.