Following previous increases, Indian hot dip galvanized (HDG) coil exporters have maintained their prices unchanged during the past week at $725/mt FOB, but transaction activity has slowed down despite US steel mills’ rising prices, traders said on Thursday, August 3.
“Despite US steel mills holding on to higher base prices for flat steel products, Indian exporters have slowed down their transaction activities as they have been wrong-footed by the sharp appreciation of the Indian rupee,” a Mumbai-based trader said.
“Having already increased export offers earlier in the month, HDG exporters now have little leeway to adjust prices to compensate for the erosion of margins caused by the strength of the Indian currency against the US dollar,” the trader added.
The steady rise of the Indian rupee gained further momentum during this week, reaching a two-year high of INR 63.70 to the US dollar.
Several traders said that a number of large domestic steel mills like Tata Steel and JSW Limited have already announced a revision of their marketing strategy to focus more on the domestic market rather than on exports.
At least two other traders said that, while inquiries from US buyers have continued during the past week, exporters are reluctant to conclude transactions fearing a further strengthening of the Indian currency, while they do not have much room to revise their offer levels.