Exports of Indian hot dip galvanized (HDG) coils have remained in the doldrums and, even though offers have remained unchanged over the past week at $750/mt FOB, no significant transactions have been reported in this period as exporters are nervous due to the appreciation of the Indian currency, traders said on Thursday.
“US flat product prices are seen to be moving sideways after falling late last month, and reports indicate that distributors’ stocks are low. But this has failed to have any impact on Indian exports,” a Mumbai-based trader said. “The uncertainties and currency risks are too high at the moment for Indian HDG exporters to push volumes overseas,” he added.
Market sources said that, with the Indian currency strengthening against the US dollar and edging towards breaching the INR 63 to the dollar mark, exporters have little incentive to ship overseas.
The sources said that, at current export offer levels, total earnings in rupee terms are almost the same for domestic sales as for overseas sales, and so naturally large Indian steel mills are turning down enquiries from their foreign buyers.
At the same time, with rising prices of coking coal and other inputs, these steel mills have no window to hike export offer prices to offset losses in margins from the appreciating local currency, the sources pointed out.