Metals Monthly : Domestic prices remain subdued; industry awaiting safeguard duty by Motilal Oswal Financial Services Ltd
* During Jan’25, flat steel prices remained largely muted MoM for both HRC and CRC at INR47,000/t and INR53,500/t (vs. INR47,000/t and INR55,500/t in Nov’24), respectively. This was primarily because of weak global prices, weak domestic demand, and elevated imports into India.
* Chinese HRC (FoB) prices slipped 3% MoM to USD470/t in Jan’25 (USD560/t in Feb’24) and continued to drag down global steel prices. Domestic long steel prices inched down 1% MoM to INR53,100/t in Jan’25 due to subdued demand in the trade channels.
* Our channel check suggests mills may announce a price hike of INR1,000/t for HRC in Feb’25, while Long prices could remain under pressure in the short to medium term, led by subdued demand. The market, however, is awaiting regulatory action on controlling imports, especially as the US may announce a possible 25% tariff on steel and aluminum exported to the US.
* India’s crude/finished steel production (provisional) declined 5%/3% MoM to 12.9/12.2mt in Jan’25. Imports remained elevated at 0.87mt in Jan’25 (+3% MoM), while exports remained muted at 0.40mt (-11% MoM). Our channel check shows that demand may remain subdued, while planned maintenance at key mills will tighten the supply and support prices. We expect subdued demand may limit the potential price hike.
* For non-ferrous, the alumina average prices surged to USD800/t in mid-24 due to supply constraints in Australia and bauxite supply issues in New Guinea. The situation has stabilized and the alumina average prices in Jan’25 moderated to USD611/t (-15% MoM). Alumina prices are expected to decline further due to increasing supply and the reopening of previously closed refineries
* Aluminum/nickel prices remained flat MoM at USD2,570/USD15,380 per ton in Jan’25. In contrast, zinc and lead prices declined by 7% and 4% MoM to USD2,800/t and USD1,920/t in Jan’25, respectively.
Iron ore prices firm; coking coal prices remain muted
* In Jan’25, the iron ore prices remained firm at INR6,000/t for lumps and INR5,060/t for fines after a price cut of INR350/t by NMDC for both Baila lumps & fines from Chhattisgarh. The prices of iron ore produce from Karnataka mines remained flat MoM.
* Premium HCC coking coal prices (CNF Paradip, India) declined 4% MoM to USD205/t in Jan’25 due to weak steel demand.
* Domestic coal production was up 4% YoY at ~107mt, while Coal India reported production decline of 1% YoY to 78mt in Jan’25. From Apr-Jan’25, Coal India’s production rose marginally by 2% YoY to 621mt, whereas domestic coal production grew by 6% YoY to 831mt.
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