Ex-India hot dip galvanized (HDG) trade remained inactive during the past week amid low bids, rising logistical costs, buyers’ expectation of a correction and low export allocations based on moderate domestic demand, SteelOrbis has learned from trade and industry circles.
Sources said that ex-India HDG (grade Z 120) official offers are stable in the range of $780-790/mt FOB. But bids were submitted at $740/mt FOB at the highest, with buyers seeking deeper discounts to partially offset rising freight and insurance costs after the escalation of the war in the Middle East.
According to the sources, even though flat product prices are being increased by local mills in Europe, buyers were submitting bids but only at lower levels to adjust for higher CIF (cost, insurance and freight) rates but these are unacceptable to Indian mills facing rising costs of production driven by higher energy charges.
“There are tentative signs of relative improvement in buying interest in Europe. But Indian sellers are facing competitive challenges on pricing. Firstly, there are more competitive ex-China offers. At the same time, the fresh surge in shipping charges is a strong headwind against finalizing CIF-based sales contracts. Indian mills are not in a position to make adjustments for both factors to push sales,” an Indian mill said.
“Galvanizing furnaces are being operated at lower capacity levels to ensure optimal energy usage. There is sufficient domestic demand for this output. Hence, large exporters are preferring to wait for a stronger rebound in destinations,” he added.
