Ex-India hot dip galvanized (HDG) coil prices have been ‘notionally’ kept stable over the past week as trade activity fell silent after sellers paused submitting offers amid robust domestic flat product sales and so they have been unwilling to push discounted sales overseas.
Sources said that ex-India HDG (grade Z120) prices are stable at $675-710/mt FOB but bids from the Middle East have been reported lower in the range of $650-660/mt FOB. Meanwhile, most large mills which had been active in discounted sales in earlier weeks are heard to have exited exports, resulting in no confirmed deals during the past week.
According to sources, while there has been mild-to-moderate buying interest in the Middle East, the market remains price-sensitive. Indian mills, meanwhile, are unwilling to sustain the discounted sales seen earlier, as they are under pressure to maximize margins ahead of the fiscal year-end. More importantly, most mills are benefiting from very strong domestic demand and prices for flat products across categories, and therefore they see little need to push overseas sales through aggressive pricing. At the same time, the competition with Chinese HDG suppliers has been strong in the Middle East, with deal prices reported at around $655-660/mt CFR in the UAE and Saudi Arabia, which means the gap between Indian and Chinese offers is more than $40/mt.
“Indian mills have paused exports, and they can wait for workable prices to consolidate higher against the backdrop of buoyant local sales,” an affiliate of Tata Steel Limited told SteelOrbis.
“In our assessment, a number of large mills are re-jigging their product portfolio in order to cater to the local demand pattern for various flat products, and hence they have lower-than-normal export allocations for HDG during this last quarter of the current fiscal,” he added.