Indian exporters have lowered their offers for hot dip galvanized (HDG) coils by $5-10/mt over the past week to around $830-825/mt CFR US, but transaction volumes have remained muted as buyers had been expecting larger price reductions, traders said on Thursday, September 3.
According to a Mumbai-based trader, local exporters seized the opportunity of rupee consolidating at levels weaker than INR 66 to the US dollar to adjust offers and push volumes.
“However, the price reduction was possibly too little, too late. Most buyers reported higher inventories at US distributors and falling flat steel prices, and so lower Indian HDG offers were not attractive enough to entice buyers to conclude transactions,” he said.
A market source said that the launch of formal investigations by the US Department of Commerce following trade petitions filed against imported hot rolled coil (HRC) has impacted overall sentiment among US buyers.
Meanwhile, in the Gulf Co-operation Council (GCC) markets, sources said that flat steel demand has slumped sharply with a significant rise in negative outlook in response to the fall in oil prices and government cutbacks on spending in the region.
Most market participants in the GCC have reported that flat steel prices in the region might have bottomed out but they did not see any upside potential given the bearish oil prices and oil producers’ reluctance to cut output, adding that this would impact large expenditure on infrastructure projects.
Gulf buyers have turned down Indian HDG offers in the range of $590-600/mt CFR Gulf and instead sought $20-25 cuts in offers, but Indian exporters have not softened their prices, the sources added.