Ex-India hot-dipped galvanized (HDG) coil prices have remained stable at elevated levels due to rising production costs. However, a combination of limited export allocations, weak demand reflected in lower bids, and uncertain shipping routes to Middle Eastern destinations has kept trading activity stalled.
Sources said that ex-India HDG (grade Z120) offers were stable in range of $750-785/mt FOB but bids from the Middle East were reported at $700-730/mt FOB with buyers seeking discounts to offset impact of rising freight rates on CIF (cost, insurance, freight) based sales contracts but not acceded to by sellers.
Local mills, facing rising costs, lower captive conversion, and limited export allocations, are hamstrung in meeting discount demands from price-sensitive buyers in the Middle East, resulting in bids being rejected.
“While higher cost of production has left sellers with little pricing power, alternative shipping routes entailing higher freight charges are also major challenges in finalizing deals. Limited availability of HDG forced by disruptions in fuel supplies for galvanizing furnaces has also prompted mills to give priority to meet domestic demand,” a source in ArcelorMittal Nippon Steel Limited told SteelOrbis.
“There is low to moderate demand in Europe. But certification process for complying with Carbon Border Adjustment Mechanism (CBAM) lacks clarity making it difficult for buyers to estimate levy liabilities dampening interest in imports,” another source said.
