Steel prices in India have been on a downtrend for several weeks now. This trend came as construction activity slowed down due to monsoon rains, which had a negative impact on sales of long steel products such as rebar. The expected post-election recovery has not materialized either. In addition, falling raw material prices failed to support finished steel prices, worsening the situation. Buyers postponed bulk purchases in anticipation of further price declines.
Looking at specific price movements, rebar prices at the commercial level fell by INR 800-2,000 (USD 10-24) per ton across different regions to four-week lows. In Mumbai, the benchmark rebar price fell by INR 2,000 (USD 24) to INR 52,300 (USD 624) per ton. In the projects segment, rebar prices fell by INR 1,500-2,000 (USD 18-24) per ton to INR 51,000-51,500 (USD 609-615).
The induction furnace rebar market was also lower, with prices in Mumbai falling by INR 300 (USD 4) to INR 46,500 (USD 555) per ton. Quality concerns raised by the National Highways Authority of India (NHAI) further affected demand for these products.
Stock levels rose and remained stable for 12-15 days. The price differential between blast furnace and induction furnace rebar narrowed to INR 6,000-6,500 per ton (USD 72-78) in July from INR 6,500-7,000 per ton (USD 78-84) in the previous month.
Imports of flat steel products, including hot-rolled and cold-rolled coils, are expected to rise to 0.36 million tons in July from 0.33 million tons in June. Recent deals for HRC at USD 562-566 per ton CFR India may continue to suppress prices.
On the export side, Indian steel offers have been on hold partly due to higher Chinese quotas and lower prices. The European market is also sluggish due to oversupply and seasonal slowdown.
The short-term outlook for the steel market remains subdued due to weak domestic and global demand. HRC and plate imports are expected to remain high, putting further pressure on flat steel prices. The long steel market may not see a recovery in demand for some time. A direction for prices may emerge after the Union Budget is announced on July 23rd.
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