Trade-level prices of coated steel products have stood unchanged over the week. Most of the markets across the country are witnessing reduced activities ahead of the Diwali festival.
SteelMint’s weekly assessment for galvanised plain coil (GPC) stands unchanged at INR 67,000-68,000/t and that for pre-painted galvanised iron (PPGI) at INR 76,500-77,500/t exy-Mumbai, excluding GST @ 18%.
A point to note is that major coated steel producers had increased prices by upto INR 1000/t for early-October sales at the beginning of the month.
Why have coated steel prices remained range-bound?
1. Coating material prices: The steeper increase in zinc prices over January-April 2022 waned off towards September to $3,136/t as per a press release from the Society of Indian Automobile Manufacturers (SIAM). However, the prices had spiked by 15% m-o-m to $3,572/t in August and this was mostly due to the cut in global production amid sky-rocketing electricity prices. Also, the prices of zinc had increased gradually to $4,371/t in April this year from $3,608/t in January over the Russia-Ukraine geo-political tensions.
However, the prices are likely to fluctate in a band of $3,100-3,300/t as per the SIAM press release. This has kept the trade level prices supported over the period of past one month with minor fluctuations.
2. Prices of substrate materials remain range-bound: The prices of HRC and CRC have dropped marginally this week in the Mumbai market. However, the price range was mostly identical at INR 56,500-57,500/t for HRC and INR 65,000-66,000/t exy-Mumbai, excluding GST @ 18%. Moreover, the difference between CRC and GP prices which normally remains around INR 6,000-7,000/t has reduced to around INR 2,000/t as of the current week’s assessment. This could be another reason behind limited movement in the prices in the near term.
3. Buying interest remains lukewarm: The slight improvements seen in prices and market sentiments over June to August started moderating in early October. The expectation of a price hike in October after the one taken towards mid-September pulled sellers and end-buyers out of their shells.
“Most of these participants including pre-engineered buildings, power and transmission and white goods stocked up by September end,” SteelMint learnt from reliable trade channel participants. Other buyers lifting materials from the trade channels have started moving out of the market earlier than anticipated ahead of the festival, they added.
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