Ex-India hot dip galvanized coil (HDG) suppliers have attempted an increase in offers by up to $30/mt, supported by green-shoots of optimism from the local market and several reports of at least few mills commencing negotiations for long-term supply contracts.
Ex-India offers have been reported at $810-840/mt FOB for 0.57 mm, Z120-40 HDG, while two weeks ago the price for this grade was at around $780-820/mt FOB. Though there has been a rumor in the Indian market about a small sale to Europe at $830/mt FOB, this has been disproved by most market sources, at least for this zinc coating. Market sources said that competition is very strong in Europe now with Vietnam offering Z120 HDG at $830/mt CFR and buyers are still reluctant to purchase. Moreover, in the local market in southern Europe mills have been offering at equivalent to $775-785/mt CFR, causing imports to be out of the range of interest of buyers.
Market participants also said that the more significant attribute of the improved mood among Indian suppliers has been the reports of at least two large integrated mills commencing long-term supply agreement negotiations (for January-March) with buyers from Europe and the Gulf.
Though details of the negotiations have not been divulged by parties, sources in the know said that the talks are based on 3-5 percent discount on the average spot price of the previous four weeks.
“Yes, possibilities of long-term supply agreements at a time when spot export sales remain in the doldrums are a big positive going ahead. We don’t know if such an agreement will be successfully signed yet. But it does offer a win-win situation to both buyer and seller. The seller is able to plan production knowing the volumes booked in advance, while the buyer is assured of a discount, a benefit both in a rising or falling market,” an official at a private mill, not engaged in the negotiations, said.