Local integrated mills in one of the most aggressive moves in recent months have hiked ex-India hot dip galvanized (HDG) coil prices amid the tight supplies of intermediate products rather than due to any demand improvements in key destinations.
Sources said that ex-India HDG prices has been hiked by an average of around $40/mt to the range of $770-780/mt FOB, even though export trade activity remains at a low ebb with little buying interest in the Gulf region and Europe, with the latter going through lean business activity during the holiday season.
The sources said that most of the larger Indian mills have facing shortage of flat intermediate products amid a combination of an improvement in local sales volumes and prices, along with some mills implementing maintenance shutdowns.
The only trade reported during the month was a booking of 5,000 mt for delivery to Rotterdam at $778/mt FOB, but the stray trade activity has not been a deterrent for producers to push up prices counting on local demand buoyancy.
“Sharp improvements in local demand in India for HRC and CRC are pushing up HDG prices. Key overseas destinations are quiet and local mills are not under pressure to conclude deals. At the same time, there are few spare intermediates to feed captive conversion mills and local export allocations are prompting aggressive hikes in HDG prices,” a source at ArcelorMittal Nippon Steel Limited said.
“Our assessment is that mills will go in for further HDG price hikes once business activity resumes in Europe, once new tariff quotas kick in and as the local demand uptick continues to consolidate,” a market source told SteelOrbis.