Ex-India hot dip galvanized (HDG) coil prices have increased for the second consecutive week, with mills citing rising input costs and alignment with the recent sharp upward revision in flat product prices. However, trading activity has remained limited due to logistical disruptions, SteelOrbis learned from trade and industry sources on Thursday, March 26.
Ex-India HDG prices for grade Z120 have increased by around $10/mt week on week to approximately $730-765/mt FOB. Producers have attributed the rise to tighter availability of flat products for conversion and higher costs of imported raw materials. However, at least two officials from large mills stated that current ex-India prices are merely paper quotations, as overseas sales remain at a standstill.
They noted that, on the sellers’ side, exportable volumes are uncertain due to multiple production challenges. On the buyers’ side, elevated logistical costs and uncertain delivery timelines, amid the ongoing war in the Middle East, are keeping buyers on the sidelines as they seek to avoid global trade risks.
“We are receiving unconfirmed reports that some preliminary negotiations for sales to the UAE have begun based on alternative shipping routes. However, we cannot verify this information, nor do we have any guidance on pricing for such transactions,” an official at a large integrated mill told SteelOrbis.
“Given the current geopolitical situation, confirmed deals appear overly optimistic,” he added.
Furthermore, according to sources, although large mills have not disclosed category-wise production levels, insiders claim that some HDG producers have been forced to drastically cut output due to an acute shortage of natural gas, a critical energy source required to heat and maintain the temperature of galvanizing baths.
It was noted that mills require a continuous and uninterrupted energy supply - primarily natural gas - to maintain galvanizing bath temperatures around the clock. Any disruption in energy supply can force these baths to shut down.
Under these circumstances, mills are cautious about entering into overseas sales contracts at a time when production cycles remain uncertain, sources said.
