Indian induction based mills are reported to have witnessed an increase in finished steel inventories last week. Increased production cost (due to higher iron ore & pellet offers) and subdued finished steel sales continued to bother Indian IF mills last week, SteelMint learned after speaking to several small and mid sized players across the country. Mills in eastern part of India have raised their capacity utilisation last week in view of the easing out of oxygen shortage issues, although southern region continues to operate at less than 50% capacity.
Overall IF mills contribute about 30-35% of India’s crude steel production.
India’s COVID situation appears to have peaked out, however the daily numbers of new infections being reported, are still much higher than in the first wave. Most of the states are still under lock down and it is unlikely that government would ease these lockdowns anytime before May end or June first week. Steel demand, otherwise also remains weak during monsoons (June-August) due to seasonal slowdown. These two factors combined are compelling the mills to explore export options (billets & wire rods primarily) on active overseas inquiries and an attempt to liquidate stocks.
SHFE rebar futures have dropped today by about RMB 109 ($17) in last few trading sessions.
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