India: Trade-level coated flat steel prices drop by up to 1,600/t ($19/t) m-o-m in Jul'24

• Lacklustre buying in traders' market weighs on prices
  
  
• Maintenance shutdowns at HSMs impact substrate HRC production levels
  
  

The monthly average trade-level prices of coated flat steel products dropped by around INR 1,300-1,600/t ($16-19/t) m-o-m towards the end of July 2024. Buyer showed preference for low-volume procurements over bulk and increased bargaining in July, which weighed on price levels.

The monthly average prices of galvanised plain (GP 0.8mm / CTL, 120 gsm) in sheet form dropped to INR 63,500/t ($758/t) exy-Mumbai (down, INR 1,300/t or $16/t) , and pre-painted galvanised iron (PPGI- 0.5mm / CTL, 90gsm) to INR 72,600/t ($867/t) exy-Mumbai (down, INR 1,600/t or $19/t) in July 2024.

The weekly assessment for GP (0.8mm / CTL, 120 gsm) in sheet form edged down by INR 200/t ($2/t) to INR 63,100/t ($754/t) exy-Mumbai to INR 62,500-63,500/t ($746-758/t). Similarly, PPGI (0.5mm / CTL, 90gsm) prices dropped by INR 900/t ($11/t) to INR 72,600/t ($867/t) exy-Mumbai to INR 71,000-72,500/t ($848-866/t) as on 25 July 2024. The prices mentioned above are exclusive of GST at 18%. (USD 1 = INR 83.7376 ; INR 1 = USD 0.0119421)

The leading private coated flat steel producers had announced their list prices for GPC (0.8mm, 80gsm) at around INR 63,500-64,000/t ($758-764/t) ex-Mumbai while PPGI (0.5mm, 90gsm) was at around INR 73,500/t ($878/t) ex-Mumbai for July 2024 sales.

Production and consumption: The production volumes of GP/GC have reduced to 0.821 mnt in June 2024 compared to 0.923 mnt a month ago. Consumption of coated flats (including PPGI an galvalume) dropped to 0.834 mnt in June against 0.863 mnt reported in April and May.

There have been some maintenance shutdowns taken by some private steel mills at their hot-strip mills (HSM) in May and June 2024, which impacted production levels of HRCs by around 0.490 mnt. This in turn impacted the availability of feedstocks for the downstream coated flat steel products. Further, a couple of private steel mills took maintenance at their HSMs in July which effected an estimated production loss of 0.500-0.550 mnt during the 15-30 days downtime. This is likely to keep the production volumes low in July and August as well.

The exports of coated flats (including PPGI and Galvalume) also dropped from April (0.21 mnt) till June (0.07 mnt) this year.

End-user industrial demand slows: Demand from the green energy segment has slowed with the declining pace of activities. The monthly addition in installed capacity of solar power was reduced to 1,197 megawatts (MW) in June, which was around 1,640 MW a month back as per the Central Electricity Authority (CEA) data. The business-to-consumer segment sales of the mills gained some support from the automobile and pre-engineered buildings clientele, helping to ease out inventories and showing decent consumption.

Outlook

Trade market prices might drop in the near term considering the limited buying appetite in the traders' market. Also, market participants are anticipating that steel mills will provide some support or reduce their list prices for August 2024 sales, amid sluggish market activities.