Indian export offers for hot dip galvanized (HDG) coils have remained at around $870-875/mt CFR US, but transaction volumes have dipped during the past week due to falling flat product prices and rising inventories in the US market, traders said on Thursday, November 4.
According to a Mumbai-based trader, US flat product prices have seen a downward correction prompting buyers to take a pause from concluding transactions with Indian HDG exporters and instead focus on domestic products.
Moreover, year-end considerations coming into play and higher-than-average inventories at US steel distributors have also contributed to the low volume of HDG export transactions from India, he added.
Market sources said that India exporters have adopted a wait-and-see stance in reaction to the declines in HDG export volumes, in order to allow the US flat steel product price correction to run its course.
With the Indian rupee continuing to slide against the US dollar and currently at INR 61.91 to a dollar, exporters have room to adjust their HDG offers by $15-20/mt while maintaining margins, the sources said.
However, it was likely that Indian exporters might wait until the New Year to adjust prices and push volumes after buyers get over year-end considerations and the approaching holidays, the sources added