Indian exporters of hot dip galvanized (HDG) coils have increased their offers by around $15/mt during the past week to $635-645/mt FOB in order to maximize volumes and margins in view of the weakening of the Indian currency and rising flat product prices in the US market, traders said on Thursday, November 24.
“With US flat steel product prices edging up, there has been a noticeable improvement in the number of transactions and the volumes of Indian exports,” a Mumbai-based trader said.
“But given the sharp rise in the number of enquiries, we expected a much higher transaction volume. It is possible that many of our US HDG buyers are still cautious ahead of the change of administration in the US,” the trader said.
“However, despite this negative, Indian exporters have been quick to adjust their offers to seize the opportunity provided by the weakening Indian currency to ramp up margin realizations against the dollar,” the trader added.
The Indian rupee, currently at INR 68.57 to the dollar, is inching close to the low of INR 68.84 to the dollar last recorded in 2013.
Nevertheless according to another trader, it is not yet clear how much of the rise in US flat product prices can be attributed to expectations of imposition of higher tariffs by the new US administration, in which case the buoyancy in Indian HDG export activity may be short-lived.