India steel: Monsoon rains hit HRC demand

India's domestic hot-rolled coil (HRC) price continued its fall this week as demand dropped further with the onset of monsoon rains, restricting construction activity in the country.

Monsoon rains and strong cyclonic winds affected transportation this week in southern and western states of the country, including the financial hub of Mumbai, resulting in a slowdown of economic activity. India's monsoon typically lasts between June-September.

Trade volumes continue to be low with buyers purchasing only for immediate use to avoid stocking of inventories.

The Argus assessed price for HRC ex-Mumbai fell by 500 rupees/t from last week at Rs39,500/t ($577/t).

While most HRC producers have dropped their ex-mill offers to Rs39,000/t, the main participants such as Tata Steel and JSW Steel are still maintaining slightly high offers at Rs39,500-40,000/t. But consumers are negotiating hard and bids were at Rs38,500/t.

Import bookings from Japan and South Korea totalling about 50,000t were at $510-511/t cfr Mumbai for August shipment.

Steel producers were disappointed at the lack of any import protection measures in the budget announced by the finance minister today. Some market participants expect a safeguard duty on HRC imports to be announced soon.

India's finance minister Nirmala Sitharaman announced a $1.5 trillion investment in infrastructure over the next five years that may support medium-term steel demand. A target for building 19.5mn state-funded houses by 2022 is also forecast to generate demand for 17mn t of steel.