Weak demand especially from infrastructure and engineering sector had an adverse impact on flat products market in India.
Indian HR/CR prices continue to remain unchanged for over a month following muted demand from its user segments including infra and engineering sector.
Current offers for 2.5mm HRC are assessed at INR 35,000-35,500/MT (ex-Delhi), INR 34,500-35,000/MT (ex-Mumbai) and INR 36,000-36,500/MT (ex-Chennai). All prices include excise of 12.5%.
Offers for 0.9mm CRC are assessed at INR 40,500-41,000/MT (ex-Delhi), INR 39,500-40,000/MT (ex-Mumbai) and INR 41,000 (ex-Chennai). Prices include excise of 12.5%.
Demand Scenario in Key Sectors
Indian infrastructure industry has been once again hit by funds crunch. Although government is trying hard to revive the sector by pushing private companies to make investments in infra projects, banks have become quite reluctant to make infrastructure lending. This is because of the recent spurt in the number of bad loans, most of which have exposure to infra sector.
Leading PSUs including Bank of Baroda, Bank of India and IDBI Bank, reported their highest ever quarterly losses aggregating to over INR 12,000 crore, while others like State Bank of India (SBI) and Punjab National Bank (PNB) witnessed sharp erosion in profits in the last quarter of FY16.
Another key industry, capital goods, is facing challenges like delays in project execution, lower order inflows due to slow growth in India’s power sector and the shaky financial situation of the state power distribution companies resulting in poor demand of from the industry.
Indian Steel Mills Response
Despite sluggish demand, Indian steel mills didn’t lower their flat products prices and rolled over their prices for this month. In secondary market though, traders are selling their products at a discount of INR 1,000-1,300/MT.
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