Indian hot dip galvanized (HDG) coil export offer prices have remained stable at $750/mt FOB over the past week, while market activity has continued to be negligible as Indian HRC export offers failed to compete with falling flat steel product prices in the US due to the appreciating Indian currency against the US dollar, traders said on Thursday, May 18.
“The Indian HDG export market is in for a prolonged period of inactivity. In fact, the macro issue of the appreciating Indian currency is negating the export potential of all flat steel products from the country,” a Mumbai-based trader said.
“Margins from exports are heavily linked to the currency simply because of the limited cost competitiveness of Indian steel production. The upward trajectory of the Indian rupee will pose a medium-term challenge to the conclusion of overseas transactions,” the trader added.
Earlier in the past week, the Indian rupee gained 0.86 percent against the US dollar over five trading days but dipped thereafter, while currency dealers maintain that the local currency will continue to gain with the next upside forecast at INR 63.50 to the dollar, from the level of INR 64.15 to the dollar on Wednesday.
Market sources said that, with flat steel product prices in major export markets like the US seen to be falling, US buyers are unwilling to respond to India’s unchanged offers.
At the same time, with Chinese HDG offers remaining $20-30/mt cheaper than Indian offers on FOB basis, Indian exporters’ prices have become uncompetitive in the international markets, the traders added.