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Demand stable for India`s colour-coated steel sheet

Published on 5th July 2019

 Indian domestic prices for colour-coated steel sheet was largely unchanged this week on stable demand. The steel product is among the few in India that has seen stable demand, even as most of the other categories have shown consistent decline in demand and prices over the past couple of months.

The price of colour-coated sheet with 0.5mm thickness and zinc coating of 90g per square metre (gsm) remained at 59,000-61,000 rupees /t ($857-885/t) today, unchanged from last week.

Demand for colour-coated sheet held steady in June ahead of monsoon rains in north India, said a Delhi-based trader. Delay in the progress of the monsoon this year has helped to support demand for colour-coated sheet used mostly in construction.

Monsoon rains hit the southern coast of India in the first week of June, moving to the west coast this week and were gradually expected to move to the north.

Demand and prices may fall once the monsoon season peaks and hampers construction activity across India. The country`s monsoon season runs from June-September.

Colour-coated sheet is highly preferred for roofing, flyover and construction barricades, metro rail and power projects, and warehouse/storage structures. Roofing demand for this sheet typically spikes before the monsoon rains set in.

The Argus-assessed price for hot-rolled coil, the substrate for coated sheet, has dropped by Rs1,500/t since early May to Rs40,000/t on 28 June.

Market prices of domestic rebar have also fallen by Rs4,000/t to Rs36,000/t since the first week of June as real estate and infrastructure construction activity remains sluggish.

India`s total consumption of colour-coated sheet increased by 24pc on the year to 307,000t during April-May 2019. Total coated sheet imported during April-May 2019 rose by 14pc on the year to 195,000t.

Suppliers are holding off export offers for colour-coated sheet as they are concerned about market talk that the Indian government is likely to put in place new safeguard duties as part of its fiscal budget to be announced on 5 July.

JSW to acquire coated steel mill

India`s rising preference for colour-coated sheet has also encouraged large integrated mills to increase their market share of this product, with JSW Steel bidding to acquire bankrupt Asian Colour Coated Ispat (ACCIL) put on sale by creditors.

The company`s total installed capacity of 1mn t/yr includes facilities for cold-rolling and galvanising and 300,000mn t/yr for colour coating.

ACCIL`s lenders have approved JSW Steel`s bid of around $225mn this week, although a formal notification of the winning bid has not yet been made.

JSW Steel currently operates colour-coating lines with a capacity of 970,000 t/yr at Vasind, Tarapur and Kamaleshwar in western Maharashtra. The company is currently in the process of enhancing its capacity by an additional 280,000 t/yr at these plants by September. JSW Steel also aims to add two new coating lines with a capacity of 300,000 t/yr in Vijayanagar in southern Karnataka and 250,000 t/yr at Rajpura in northern Punjab.

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