Indian export offers for hot dip galvanized (HDG) coils have remained at around $830/mt CFR US during the past week, while trading activity has come to a standstill towards the end of the week with both exporters and buyers pulling back owing to uncertainties regarding price direction and currency volatility, traders said on Thursday, August 13.
According to a Mumbai-based trader, most buyers said that they were deferring transactions expecting the devaluation of the Chinese currency to deflate the revival in steel prices, and so buyers will wait for the full impact on prices to run its course.
The trader said that Indian HDG exporters have also withdrawn their offers as the minor depreciation of the rupee limits exporters' ability to be as aggressive on pricing as Chinese exporters.
Indian HDG exporters have been caught unawares by the Chinese currency devaluation and they do not have any option to counter the increased competitiveness of Chinese exports and therefore prefer to withdraw their offers and await an Indian government intervention if any, the trader added.
Market sources have said that, in order to keep pushing volumes and cope with the possibility of international currency volatility, Indian HDG exporters would have to adjust offers by at least $10-15/mt in the short term, but this does not seem viable since the trend of the rupee remains uncertain.