Indian hot dip galvanized (HDG) export offers have remained unchanged during the past week in the range of $635-650/mt FOB, but transaction volumes are still at very low levels since US buyers have remained out of the market with US flat steel prices moving to lower levels, traders said on Thursday, September 1.
“Clearly, Indian exporters’ attempts to push up offer levels earlier in August have backfired. With export offers up and US domestic prices drifting lower, few US buyers are interested in receiving import offers,” a Mumbai-based trader said.
“Buying activity for Indian HDG exports is expected to remain very slack as Indian exporters are not likely to have pricing power to push volumes through an aggressive pricing strategy,” the trader added.
Market sources said that the appreciation of the rupee to around INR 66.90 to the US dollar has caught exporters on the wrong foot and they have little leeway in rolling back the previous increase effected in offers.
However, at least two other traders said that Indian exporters will be forced to correct offers by at least $15-20/mt despite the appreciating Indian currency and risks of margin erosion as the only way to trigger some buying sentiment.