India coated steel: Prices fall

India's coated steel prices continued to fall this week because of lower consumer spending on automobiles, durable goods and real estate.

Stringent lending restrictions adopted by Indian banks have cut spending, the regional manager of a Mumbai-based mill said. This has translated into declining demand for coated steel from these consumer segments.

Monsoon rains and flooding in some parts of the country continue to hinder construction work, reducing demand for roofing sheets.

Delayed public payments for infrastructure projects are also pushing contractors to withhold any further purchases of coated steel products, a Delhi trader said.

Offers for coated steel products fell by about 500 rupees/t ($7-14/t) this week. Coated steel prices have dropped by about Rs2,000-2,500/t over the past month.

Galvanized sheet with 0.5-0.7mm thickness and zinc coating of 90 grams/m³ fell by Rs500/t from the previous week to Rs46,000/t ex-works.

Offers for thicker sheets of 0.8mm and above with higher zinc coating of 120g/m³ were heard at Rs48,000/t.

Prices of colour-coated sheet with 0.5mm thickness and zinc coating of 120 g/m³ fell by Rs1,000/t to Rs52,500/t.

The weak demand has so far run counter to expectations that consumer spending may pick up during the festive season that starts in September.

India's total consumption of coated sheets increased by 10.5pc from a year earlier to 1.85mn t in April-July, the first four months of the country's financial year, according to estimates from India's steel ministry. But demand for coated sheets has fallen since the monsoon season started in June, said the sales manager of a Mumbai-based mill. Ministry data do not provide a breakdown of coated steel consumption. Demand for colour coated sheets fell by 7.3pc to 594,000t during April-July.

Indian mills' exports of coated sheets also fell in April-July, putting pressure on the companies to focus on the domestic market.

India's total exports of painted and coated sheets were down by 27pc year on year to 215,000t in April-July, according to steel ministry estimates. Mills have also been forced to cut domestic prices as local buyers tighten their purse strings.

India's total imports of painted and coated sheets fell by 8pc from a year earlier to 387,000t in April-July, indicating lower overall consumption of coated steel in the country.