Indian Flat Products Prices Stable this Week, Fall Anticipated

Poor domestic demand coupled with situation of excess supply is likely to lead to fall in domestic flat products prices in upcoming days.

On 4 July’16, SteelMint reported that Indian manufacturers have announced a price cut of INR 1,500/MT in flat products giving up on sluggish demand in domestic circuit. This price cut came almost after a month of traders selling their stock of flat products at discounted prices.

However, this week Indian flat products prices have remained firm. Current offers for 2.5mm HRC (IS2062) are being heard at INR 33,500-34,000 (ex-Delhi) and INR 33,500-34,000 (ex-Mumbai).

0.9mm CRC (IS 513, Gr.o) offers are heard at INR 38,000 (ex-Mumbai) and INR 39,000/MT (ex-Delhi). Prices include excise of 12.5%.

Current offers for base size commercial grade plates are being assessed at INR 28,000 (ex-works), excluding excise of 12.5%.

Demand-Supply Mismatch

Although, no change in prices have been reported this week, speculations are rife that further price cuts are possible from the manufacturers end in upcoming days.

With the projects in key sectors like infra and power being stalled due to liquidity crunch there is no significant improvement in demand for steel.

While, on the supply side Indian manufacturers are ramping up their steel production on the instruction of banks. Lending banks have asked the steel companies to increase their production in order to cover their fixed costs amid falling prices and depleting profits.

Also due to poor realizations from export sales, Indian manufacturers are not much interested in exports and have directed majority of their supplies in the domestic market, creating a situation of oversupply in the domestic market.

Flat Products Prices as on 12 Jul’16

Prices in INR/MT
Prices include excise of 12.5%
Source:SteelMint Research