Ex-India hot dip galvanized coil (HDG) prices have been maintained but have been largely rendered ‘notional’ by falling ex-China prices, coupled with continuing silent trade conditions.
Sources said that ex-India HDG prices have been kept stable by sellers at $730-740/mt FOB, but no significant bids or offers have been heard in the market over the past week.
However, several market participants have reported the conclusion of a large-volume deal for around 40,000 mt negotiated between a local flat product integrated mill and a Swiss-based steel and allied raw materials trading firm for deliveries during the October-December quarter. However, no indicative price confirmation has been available from either the buyer or seller, but market intermediaries have speculated on discounts ranging at 5-8 percent. According to the sources, the purchase by the trading firm was for re-export to southern Europe. Though it could not be confirmed, the deal was also facilitated by the availability of tariff quotas for shipments into Switzerland.
“The prolonged lull in HDG exports is not a big concern for local mills facing stronger competitive offers in the Gulf region and Europe as export allocations are very low. Rolling mills for captive conversion are being operated at very low levels as the focus is more on local sales of commodity steel,” an official at a private mill told SteelOrbis.
“The margin of value addition that is the spread between per mt margins of hot rolled coil (HRC) and HDG is very narrow and hence producers are preferring to wait and watch key destinations overseas and for new tariffs to come into effect in Europe, before commencing to submit new offers,” he added.
