India coated steel: Monsoon rains hit demand

India's coated steel prices fell this week, as monsoon rains slowed construction activity.

A trade emerged for galvanised sheet of 0.8mm thickness with a zinc coating of 90 grams/square metre (gsm) at 48,500 rupees/t ($686/t) ex-works, about Rs1,000/t lower than last week.

Offers in the first week of June for similar sheets of 0.5mm thickness with zinc coating of 90gsm were at about Rs52,000/t ex-works.

Prices of colour-coated sheet have also been falling since June. Offers for colour coated sheets of 0.5mm thickness with zinc coating of 90-100gsm were at Rs 55,000/t this week, lower by Rs500/t over the past week. Offers for similar material were at Rs59,000-61,000/t during the first week of June.

Coated sheet is used mostly for roofing and barricading.

A credit squeeze in the economy has also slowed real estate, infrastructure and industrial projects, hitting demand for all grades of steel. A number of infrastructure projects that were announced earlier are stalled because of a lack of both public and private-sector funds, said the manager of a Mumbai-based steel mill.

Most main mills had increased listed prices of coated products by Rs500/t earlier this month. But the market is unwilling to accept these prices amid weak demand, said a Delhi-based trader.

Demand may resume sometime next month as the monsoon rains ease.