Ex-India hot dip galvanized (HDG) coil prices have been increased by large mills in the past week, citing volatility in input costs, thereby muting trade activity, with deals concluded only at the lower end of the offer range, SteelOrbis learned from trade and industry circles on Thursday, May 22.
More specifically, ex-India HDG (Z120) offer prices have been increased by around $20/mt over the past week to the range of $700-720/mt FOB.
According to sources, mills have been citing volatility in input costs particularly zinc, a critical input which according to major domestic supplier Hindustan Zinc Limited is expected to touch $2,750/mt this fiscal year, with demand rising 1.6 percent and local supply growth ranging from flat to up one percent.
Local mills have also been somewhat forced to increase HDG prices to align them with changing pricing across the flat products segment. Ex-India offers for cold rolled coil (CRC) to Europe are currently being submitted at $650-680/mt FOB. Under these circumstances, mills need to keep offer prices for HDG, entailing higher value addition, at a higher differential compared to CRC prices.
“Even at current HDG export offer levels and production costs, overseas sales margins have remained negligible and do not reflect the higher value addition compared to CRC sales,” a market insider told SteelOrbis.
The higher offers submitted have muted trade activity in the Middle East as buyers in the region have had multiple competitive offers, led by aggressive sales for ex-China material. Sources said that a deal for 20,000 mt was reported by a Gujarat-based exclusive flat product mill, for delivery to Antwerp at $700/mt FOB, net of discount on invoice prices.