- Mills raise list prices for May eyeing improved demand
- Monthly average prices rally for 4 months in succession
Two major domestic coated flat steel producers have announced an increase of INR 1,000-1,500/tonne ($12-17/t) in their list prices for May 2025 dispatches, effective 1 May. The hike has been INR 1,000-1,500/t in galvanised plain (GP) coils, and INR 1,000/t- for pre-painted galvanised iron (PPGI) coils. Furthermore, one of the two mills has increased its list prices by 1,500/t while the other having already taken a hike of INR 1,000/t in mid-April, increased it by only INR 1,000/t.
The effective list prices of GP (0.8mm, 80gsm, IS277) stand at around INR 65,000-65,600/t ($757-764/t) ex-Mumbai, while those for PPGI (0.5mm, 90gsm, IS14246) are around INR 74,500-76,500/t ($868-891/t) ex-Mumbai for early May dispatches. Prices mentioned are for coil forms, excluding GST at 18%. (USD 1 = INR 85.8637; INR 1 = USD 0.0116464)
The monthly average trade level prices have shown a continual increase over the last four months (January-April). The price levels in April for GP (0.8 mm/CTL, 120 gsm, IS277) stood at INR 64,300/t ($751/t) exy-Mumbai (up INR 3,300/t ($39/t), m-o-m) while that of PPGI (0.5 mm/CTL, 90 gsm, IS14246) at INR 73,400/t ($857/t) exy-Mumbai (up INR 4,000/t ($47/t), m-o-m). The figures are rounded off to the nearest 100 and exclude GST at 18%. (USD 1 = INR 85.602; INR 1 = USD 0.0116820)
Safeguard duty: The recommendation of a safeguard duty on 19 March and the levy of a 12% duty on a provisional basis for 200 days on 18 April kept market sentiments buoyed. This has restrained the inflow of cheaper imported alternatives into the market providing room for domestic producers to tighten their grip on the market. The threshold price for zinc-coated flat products has been set at $861/t CIF (cost, insurance and freight) India, whereas the threshold price for colour-coated or pre-painted was assessed at $964/t CIF India, as per the gazette released by the Directorate General of Trade Remedies (DGTR) on 19 April.
Market updates
Trade prices rise for the fourth week in a row: Trade-level prices of coated flat products continued to rise for the fourth week in a row.
The latest weekly assessment, on 8 May, showed GP (0.8 mm/CTL, 120 gsm, IS277) coil prices at INR 65,500/t ($/t) exy-Mumbai, with offers varying in the range of INR 65,000-66,000/t ($/t). Similarly, PPGI (0.5 mm/CTL, 90 gsm, IS14246) was assessed at INR 74,700/t ($/t) exy-Mumbai, with offers at INR 74,000-75,000/t ($/t). These prices are minus GST at 18% (USD 1 = INR 85.8637; INR 1 = USD 0.0116464).
The demand in the traders’ market had been better over the last three weeks. However, because of the tensions in the north-western region, demand has started to show signs of weakening in several markets this week. “End-buyer industries in the traders’ market have turned a little cautious, and credit recovery has also hit hurdles. Also, supplies have tightened and mills are supplying lower volumes against the quantities raised through purchase orders,” said a distributor from western India.
Demand-supply dynamics: Supply constraints propelled mills to raise their list prices amid production-related hassles while consumption volumes improved. Mills are focusing on the business-to-customer (B2C) segment and a diversion of supplies to infrastructure, construction and manufacturing segments was recorded. Also, pre-monsoon demand kept demand rolling in from profilers while there are hints about demand improving from the pre-engineered building segment in the near term.
Meanwhile, the market indices showed improvement in activities in the manufacturing segment, reflecting an increase in consumption levels. For instance, the manufacturing purchasing managers’ index (PMI) increased by 0.1 points to 58.2 in April as against the previous month. This hints at mills witnessing improved demand from their business-to-consumer (B2C) segment sales, while trade market participants have been complaining about need-based demand and low sales.
Production and consumption volumes: The production of coated flat products increased by 8% m-o-m to 0.947 mnt in March compared to 0.877 mnt in February, as per recent data released by the Ministry of Steel. The average daily production was computed at around 30,548 tonnes per day (tpd) in March compared to 31,321 tpd in February.
However, consumption increased by around 1.5% m-o-m in March to 0.976 mnt as compared to February’s 0.962 mnt. Out of these volumes, PPGI or the colour-coated coils aggregated 0.309 mnt in March and 0.298 mnt in February.
Outlook:
Trade-level prices are likely to follow an upward trajectory amid favourable conditions. Improvement in demand, optimistic performance indicators, and mills’ healthy business-to-customer (B2C) segment, especially in infra-construction and automobile sectors, are tailwinds for mills looking to hike prices. Meanwhile, constraints in supplies will also provide a platform for distributors to raise their quotes.
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