India: Galvanised plain coil trade prices drop to 2-month low on subdued demand

The trade market prices of galvanised plain coils (GP) dropped further this week by INR 2,900/t ($37/t), which also hit a two month low mark. Slow buying interest amidst continual decline in prices is further pulling the latter downwards in the market.

SteelMint's assessment of GP (0.5mm, 120gsm) stood around INR 82,000-83,000/t ($1,056-1,069/t). On the other hand, those of pre-painted galvanised iron (PPGI) (0.5mm, 90gsm) declined by INR 2,800/t ($36/t) to INR 91,000-92,000/t ($1,172-1,185/t). Prices mentioned are on an exy-Mumbai basis, exclusive of GST @ 18%.

Prices drop to two-month low: The current prices of both GP and PPGI are more-or-less close to the levels last seen in mid-March. In January-March, the market had seen a continuous uptrend in prices as mills increased their price tags propelled by factors like rising prices of substrate cold rolled coils (CRC) and coating materials such as zinc, and paints. However, prices started declining as buyers turned cautious when GP hit an all-time high at 93,000/t exy-Mumbai and PPGI touched INR 100,500/t exy-Mumbai in the first week of April.

Decline in Indian HDGI export offers: Another sentiment dampener is the downward movement in the overseas trade platform. Mills have been finding it difficult to conclude deals in the overseas markets amidst the appreciating dollar and other barriers in the global trade. For instance, in the UK-EU, demand has been cooling amidst issues around opening of LCs and high power costs that are weighing on end-user demand. Export offers for hot-dipped galvanised iron (HDGI) coils (0.50mm, 900-1,250mm) from India decreased further by $15/t to INR $1,160/t FOB west coast.

"The price downtrend and slow buying interest are weighing on prices and sentiments in both overseas and domestic markets, despite more expensive coating materials,"said a western-India based participant.

Procurement need-based: Demand from the pre-engineered building segment, commerical automotive and others started to decline with the slowdown in infrastructure and other construction businesses. The only respite to the sellers has come from projects nearing completion or green energy projects which had maintained their purchases previously despite the higher prices and later due to the continuous decline.

"There were more buyers than sellers in the market in January-March. The table has turned now and there are fewer buyers at present," shared a major distributor from the north.