India: Coated flat steel market activity remains fragmented amid weak offtake

• Prices subdued amid weak demand
  
  
• Selective enquiries support limited price movement
  
  

The Indian coated flat steel market continued to face headwinds during the assessment period, with demand remaining sluggish across key end-use sectors. Buying activity for galvanised products stayed largely need-based, as customers limited purchases to immediate requirements amid weak market sentiment. Additionally, elevated inventory levels across the supply chain exerted further pressure on prices, leading to a decline of INR 100-400/t across markets.

Price update

BigMint's benchmark assessment for Mumbai GP coil (0.8mm/CTL, 120 GSM, IS 277) remained stable w-o-w at INR 75,300/t on 25 June. The market remained largely balanced, with stable mill offers and limited spot transactions keeping prices unchanged. Market participants continued to monitor demand trends, while buyers largely preferred need-based procurement.

BigMint's benchmark assessment of Mumbai PPGI (0.5mm/CTL, 90 GSM, IS 14246) increased by INR 300/t w-o-w to INR 85,500/t. The uptick was supported by improved order inflows from roofing and pre-engineered building (PEB) segments, along with firmer offers from producers. Market participants reported better enquiry levels compared with other coated products, lending support to prices.

BigMint's benchmark assessment of Mumbai BGL (0.5mm/CTL, 1220mm, AZ150) declined by INR 300/t w-o-w to INR 89,700/t. The correction reflected competitive market offers and slower bookings amid cautious buyer sentiment. Despite supply-side support in certain specifications, transaction activity remained insufficient to sustain previous price levels.

Raw material prices

India's zinc ingot (99.995%) prices increased by INR 1,000/t w-o-w to INR 374,000/t ex-Delhi on 23 June, according to BigMint's assessment. This was due to tighter import availability and supply concerns in overseas markets, which lent strength to domestic offers. However, buying activity remained largely need-based, with galvanisers and alloy manufacturers continuing to procure material cautiously amid weak downstream demand and monsoon-related disruptions.

Meanwhile, BigMint's bi-weekly benchmark assessment for HRC (IS2062, Gr E250, 2.5-8 mm/CTL) in Mumbai edged down by INR 100/t ($1/t) w-o-w to INR 58,200/t ($614/t) as of 23 June, reflecting continued pressure from subdued spot demand and cautious market sentiment. In contrast, the benchmark assessment for CRC (IS513, Gr O, 0.9 mm/CTL) remained stable at INR 65,200/t ($688/t), supported by relatively balanced market conditions. All assessments are ex-Mumbai and exclusive of 18% GST.

Market updates

The Indian coated flat steel market continued to exhibit mixed trends during the assessment period. Demand for galvanised plain (GP) products remained sluggish, with trading activity largely restricted to immediate requirements.

In contrast, the PPGI segment witnessed relatively better market activity, supported by an increase in enquiries from roofing, pre-engineered building (PEB), and infrastructure-related applications. Improved enquiry levels, coupled with firmer producer offers, supported an increase in market prices during the week, although actual booking volumes remained moderate.

The BGL segment remained under pressure despite lower availability in the market. Weak buying interest outweighed the impact of tighter supply. As a result, prices softened during the assessment period as sellers adjusted offers to stimulate transactions.

Inventory levels for GP and PPGI products at distributor and trader yards were estimated at around 30-35 days, above the typical holding period, reflecting slower material offtake. Market sources indicated that distributors have been facing margin pressure as prevailing market offer prices remain below recent mill pricing. As a result, several participants expect procurement volumes to be reduced from next month unless downstream demand improves and market prices align more closely with mill offers.

Overall, market sentiment remained cautious, with buyers continuing to follow a need-based purchasing approach while closely monitoring demand trends and inventory positions.

Outlook

The divergence in price trends across coated steel products is expected to persist in the near term, with market performance remaining largely segment-specific. While improved enquiries may continue to support PPGI prices, the sustainability of recent mill price hikes will depend on actual demand recovery and the market's ability to absorb higher offers.

Market participants will closely monitor July procurement levels, as distributors are expected to remain cautious amid inventory and margin concerns. Any improvement in construction and infrastructure activity after the monsoon could lend support to demand, while a continued gap between mill and market prices may keep trading volumes subdued.