India’s hot dip galvanized (HDG) coil export trade has lapsed into inactivity with no takers even for discounted offers, with buyers predominantly in the Gulf region staying away expecting price declines to continue, SteelOrbis learned from trade and industry circles on Thursday, November 3.
The reference offers prices for Z120 Indian HDG have remained at $830-850/mt FOB, with a midpoint at $840/mt FOB, the same as last week. However, sources said that sellers have maintained official offers at $870/mt FOB, though upfront discounts ranging at $20-30/mt have still failed to find acceptance among buyers.
According to market insiders, the continued decline in flat product prices in the US and the energy crisis impacting industries in the EU have created uncertainty in the demand outlook, while deep discounts on ex-China offers in the Gulf market have rendered Indian sellers uncompetitive.
“It is completely a buyer’s market. Indian sellers do not have much pricing leverage. Even discounts are losing as a sales proposition in the absence of demand and nervousness over macroeconomic indicators in the west,” an official at a private flat product producing mill said.
“Demand for HDG from domestic automobile companies for their export production is holding steady with overseas sales growth of passenger cars sustaining at two percent during the second quarter, which is supporting the lower output of rolling mills,” he said.
It may be noted that, as a thumb rule, Indian automobile manufacturers generally use HDG for their export production to meet standards in western markets and not for production of mass models for domestic sales.