Steel mills in India are experiencing a slowdown in demand in domestic markets, leading to a decrease in prices.
Several factors contribute to the declining demand, including the monsoon season and seasonal weakness. Two key indicators of slowing demand are a nearly 5pct decrease in production in June compared to May, and a rising stock levels.
Indian CRC prices experienced a 2pct decrease in July to INR 59,000 (USD 716) per ton. Indian HRC domestic prices in July range from INR 55,000-55,200 (USD 667-670) per ton, unchanged from June.
Rebar prices, produced through the blast furnace route, witnessed a sequential drop of approximately 5pct to INR 51,500 (USD 625) per ton.
In June, inventory levels in Indian mills increased, while steel consumption was the lowest since April. Steel consumption in June (during Q1FY23) reached 9.88 mln tons, a 5pct decrease compared to May’s 10.43 mln tons and a little over 1pct lower than April’s 9.99 mln tons.
Total finished steel production in June was 10.5 mln tons, down from 11 mln tons in May. Various steelmakers, including SAIL, witnessed production declines ranging from 1pct to 9pct. However, during the April-June period, finished steel production increased by 11.7pct according to provisional numbers.
Furthermore, Indian HRC export sales remained weak due to sluggish demand in overseas markets, leading to export offers of approximately USD 575-585 per ton FOB.
1 USD / 82.4 INR
