Ex-India hot dip galvanized (HDG) coil prices have been kept stable over the past week and, though overall trade activity has remained silent barring a few stray unconfirmed discounted sales in the Middle East, buyers in Europe have still been assessing low demand and the change in import options after the announcement of safeguard measures, SteelOrbis learned from trade and industry circles on Thursday, March 20.
Sources said that ex-India HDG (grade Z120) is stable at $700-720/mt FOB, while most large mills were heard to be refraining from submitting offers either because of having exhausted the EU import quotas, and not having decided on export allocations for the next quarter (April-June), or to avoid having to discount prices to push sales.
Nonetheless, market rumours indicated that one large mill concluded a sale of 5,000 mt for delivery to the Middle East at $695/mt FOB, net of discount.
“Middle East trade activity remains on the lower side. The market in Europe is going through a transition. Producers are attempting to increase prices, but the increases are not so high as to prompt distributors to look at imports. More importantly, import sourcing options have changed under the new safeguard levy in Europe,” an affiliate of Tata Steel Limited told SteelOrbis.
According to market insiders, Indian mills have not firmed up HDG export allocations for the next quarter. This poses both challenges and opportunities. Indian mills may get the opportunity to tap into incremental demand in the EU region. But at the same time, sellers will need to be more price-competitive. Balancing these two dynamics will be key for mills in firming up export allocations. “Our own assessment is that allocations will be on the conservative side as mills will not sacrifice margins for volume sales overseas. Instead, the focus will be more on sales in the local and MENA markets,” another source said.
