Indian hot dip galvanized (HDG) coil export offers at levels of around $860/mt CFR US have failed to attract any buyer interest during the past week, traders said.
US steel mills are trying to push up their flat steel product prices and distributors are waiting for domestic prices to settle before concluding import transactions, a Mumbai-based trader said.
Current Indian HDG offers are not acceptable to US buyers who are seeking levels $20-30/mt lower, but Indian exporters are unable to adjust their prices, the trader said.
The local Indian HDG cost of production has risen sharply following the sharp rise in input costs particularly in the cost of zinc, and exporting steel mills are in no position to push volumes by lowering their offers, he added.
He said that steel imports into the US have shown a falling trend and reports indicate that import volumes were down 11 percent during June.
US import markets could see a revival only if local steel mills are successful in pushing through substantial increases in prices of flat products, he added.
Market sources said that leading Indian galvanized steel producers like Uttam Galva Steel are facing severe pressure on margins from rising zinc prices and are unable to pass on increases in input costs to domestic customers.
Under these circumstances, neither producer-exporters nor merchant-exporters are willing to compound margin erosions by pushing volumes overseas through aggressive pricing, the sources said.
Ex-India transactions volumes to the Gulf Co-operation Council (GCC) markets have also remained at negligible levels owing to closure of businesses for the Ramadan holiday and activity has yet to pick up, the sources added.