India: Trade-level coated flat steel prices hit 5-month low in Dec'23

Trade level prices of coated flat steel products have hit a 5-month low mark with the end of calendar year (CY) 2023. The monthly average levels of weekly assessed Galvanised Plain (GP) coils stood at around INR 67,800/t ($815/t), dropping by INR 900/t ($11/t), m-o-m in December 2023. Similarly, those of Pre-painted Galvanised Iron (PPGI) fell by a shallow INR 400/t ($5/t), m-o-m to INR 78,300/t ($942/t). These price levels stand close to those reported in August 2023.

Indian major coated flat steel producers announced a rebate of around INR 1,000-1,500/t ($12-18/t) in their list prices at the beginning of December 2023 after having 'rolled-over' the same in November 2023. However, the demand in the traders' market remained lacklustre, and distributor sources complained about fewer inquiries throughout the month. Meanwhile, the need-based procurement and active bargaining by end buyers added to the woes of the distributors and other sellers in the spot market.

In the recent weekly assessment, trade-level prices of GP (0.8mm, 120gsm) coils edged down by a mere INR 200/t ($2/t) w-o-w to INR 67,000-68,000/t ($/t); and those of PPGI (0.5mm, 90gsm) went down by INR 400 t ($5/t) to INR 77,500-78,500/t ($/t) as of 28 December 2023. There were very few active buyers and sellers in the market this week amid the Christmas and New Year holiday mood at the beginning of the week, informed distributor sources across the markets under assessment. The prices mentioned above are on an exy-Mumbai basis and are inclusive of the profiling cost. The price assessment excludes GST at 18% and needs to be computed separately.

The trade level prices for coated flat products showed nominal correction in December 2023 mostly because of the end-industrial applications and the buyers preferring business-to-consumer (B2C) sales model with mills. The infrastructure and construction businesses have been fast-tracking their near-completion projects, especially the government-funded ones amid the air of elections. For instance, there has been a monthly addition of 907 kilometers (km), and 774 (km) in the National Highway network in October and November 2023 respectively, as per the data from the Ministry of Road Transport and Highways (MoRTH). These are among the top 5 monthly additions this fiscal year (FY 2024) and were achieved despite the weak labour availability amid the major festival of Diwali followed by the Chhatth Pooja in November.

Trade prices might continue to show minimal fluctuation in the near term. Mills might face a temporary slowdown in the new project announcements in the 'government-funded projects in the green energy, infrastructure, and construction' space amid the anticipation of elections in other states in the country in January-March 2024. These are likely to take away some avenues of sales for mills, who have enjoyed the most amidst improved activities in the former over the last couple of quarters, opined a few distributor sources.