India: Trade-level coated flat steel prices drop up to INR 400/t ($5/t) w-o-w

Coated flat steel prices witnessed a decline of INR 200-400/t ($2-5/t) w-o-w amid lacklustre trader market sentiments. The current weekly assessment showed galvanised plain (GP, 0.8mm / CTL, 120gsm, IS277) prices at INR 57,900/t ($686/t) exy-Mumbai, while pre-painted galvanised iron (PPGI, 0.5mm / CTL, 90gsm, IS14246) stood at INR 67,100/t ($794/t) exy-Mumbai as on 28 November 2024. Prices mentioned above exclude GST at 18%. (USD 1 = INR 84.474 ; INR 1 = USD 0.01184)

Monthly average trade-level coated finished-flat steel prices in November 2024, up INR 800/t ($9/t) compared to October. GP (0.8mm / CTL, 120gsm, IS277) prices averaged around INR 58,100/t ($688/t) exy-Mumbai and that of PPGI (0.5mm / CTL, 90gsm, IS14246) at INR 67,200/t ($796/t) exy-Mumbai. Prices mentioned GST at 18%.

List price increase fails to get absorbed: Mills' list price increases were seen for the coated flat steel products which was INR 1,000/t in the first week of November 2024. Subsequent to the announcement, mills' list prices st00d at INR 60,000-60,500/t ($710-716/t) ex-Mumbai for galvanised plain (GP 0.8mm, 80gsm) coils and pre-painted galvanised Iron (PPGI 0.5mm, 90gsm) coils are at INR 70,000-70,500/t ($829-835/t) ex-Mumbai.

This led to a slight increase in trade market prices in the first fortnight of the month. However, the boost was temporary and prices started to slide by mid-month.

Prices of GP (0.8mm / CTL, 120gsm, IS277) had closed at INR 57,000/t ($675/t) exy-Mumbai as on 24 October 2024 which increased around INR 1,300/t ($15/t) in the first fortnight reaching INR 58,300/t ($690/t) exy-Mumbai by 14 November 2024. Similarly, prices of PPGI (0.5mm / CTL, 90gsm, IS14246) were recorded at INR 66,500/t ($787/t) exy-Mumbai as of 24 October and had increased to INR 67,300/t ($797/t) exy-Mumbai on 14 November.

Production, consumption updates in Oct'24: Coated flat-steel (including galvalume) production volumes increased to 0.894 mnt in October from 0.778 mnt in September. In the year-ago period, it was around 0.773 mnt. Consumption also showed a m-o-m increase from 0.854 mnt in September to 0.987 mnt in October.

End-user industrial demand slows: Demand from the green energy segment showed a slow-paced recovery. The monthly addition in installed capacity of solar power was about 1,357 megawatts (MW) in October 2024, which was around 1,330 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 inventories and showing decent consumption while the trade channel lacked confidence and demand remained slow.

Demand in trade channel slow: Coated finished-flat steel demand in the traders' market continued to remain slow in November in contrast with the expectation of an improvement by mills and distributors. "Buyers are cautious and raising purchase orders for lower quantity to quench their urgent requirements," said a major distributor from western India. "The impact of pressure on the substrate HRC and CRC prices amid improved availability of low-priced domestic produces purchased earlier and cheaper imported alternatives in the trade channel is also being seen in the value-added coated flat products," he added.

Outlook: Trade-level prices lack support major drivers from industrial buyers which could restrict any steep increase in the near term. Thus, prices might fluctuate in a narrow band in the upcoming fortnight. Meanwhile, trade market participants are awaiting mills' list price announcements for December 2024.