Coated flat steel prices in India have declined week-on-week for GP, PPGI and BGL (Galvalume) grades due to weak sentiment created by limited buyer activity and insufficient guidance from mills. GP coils have dropped to ₹59,900/t, PPGI has dropped to ₹68,300/t, and BGL (Galvalume coils) have dropped to ₹74,500/t ex-Mumbai. Buyers remain uncertain about limiting the time frame for purchases because of liquidity issues. There continues to be weak end-user demand across regional markets, particularly in the southern and western regions, and therefore mills have not offered any substantial discounts, which impacts their buyers’ cautious purchasing behaviours. HZL’s ₹2,400/t increase in the price of zinc provides some cost pressure on galvanisers but due to weakened demand levels, mills are unlikely to pass on this additional cost pressure to their customers immediately, therefore limiting the potential for any price recovery in the short term.

Outlook

Continued weak steel consumption, cautious purchasing behaviour, and no apparent upward (or downward) price direction from steel mills point towards a likely range-bound trading environment for coated flat steel prices in the near term. The absence of sustained demand this quarter suggests that even if there were a cost push from zinc, that cost will more likely be absorbed than passed through until demand improves further. However, with India’s recent recovery in the automotive sector driven by increasing Passenger Vehicles (PV's), two-wheelers, three-wheelers and tractor sales, it appears that there will be a gradual increase in ordering interest from Q4/early Q1. This may lead to better pricing stability for GP, PPGI and BGL prices after December and reduce the likelihood of any further downward movement.